Australian property prices rose 0.8 per cent after two months of slowing capital gains, new data reveals.

Home values have recovered 4.9 per cent since February, CoreLogic figures published on Friday show.

Brisbane led the national index higher with a 1.5 per cent gain, followed by Sydney and Adelaide, with both had values rise by 1.1 per cent in August.

Melbourne prices rose 0.5 per cent while Perth was up 0.9 per cent.

CoreLogic research director Tim Lawless said the ongoing recovery in prices was “generally positive” but also diverse, with some cities still flat.

He said Sydney was up 8.8 per cent from its January trough and Brisbane up 6.2 per cent since February.

But prices in Hobart remain unchanged since stabilising in August, while property prices across the ACT have risen only 1 per cent since April.

“These are also the only two capital cities where advertised supply is tracking higher than a year ago, suggesting a rebalancing between buyers and sellers is a key factor contributing to the stability of values in these regions,” Mr Lawless said.

Conditions across Australia’s regional markets remain mixed, Mr Lawless said, with internal migration trends returning to normal after the pandemic.

Another measure of property prices published on Friday by another company, PropTrack, found home prices rose 0.28 per cent in August, with Sydney leading the charge.

Low supply

August’s figures are good news for home owners, who have enjoyed a rebound in their capital gains following sizeable price falls last year.

It appeared as though momentum in the rebound in the first half of 2023 was moderating in July because the pace of price rises eased for a second month in a row.

But that now looks like more of a seasonal blip, with August’s result signalling accelerating momentum across Australia’s major capital cities.

CoreLogic said lower-than-average supply levels remained a key reason that property prices were rising, although new listings lifted slightly through the winter.

Supply levels are still 19 per cent below the five-year average across the nation’s capitals.

“We have seen vendors becoming more active though winter, which is seasonally unusual,” Mr Lawless said.

“However, most of this fresh stock is being absorbed by the market, with the count of total capital city listings rising by only 3.6 per cent over the past two months, despite the flow of new listings jumping 12.9 per cent.”

CoreLogic said the recovery in Australian house prices was “firmly entrenched”, with values having trended higher over the past six months.

Indeed, major banks are predicting prices to rise by as much as 7 per cent this year, particularly with interest rates slated to be on hold.

Headwinds for prices

There were some headwinds that could hit the national property market in coming months, CoreLogic said, pointing to rising stock levels and persistently low consumer sentiment as headline risks for prices.

“With interest rates unlikely to reduce until well into 2024, more households are likely to face mortgage stress,” it said.

“The most recent data has continued to show mortgage arrears remain only slightly above record lows; however, the portion of borrowers falling behind on their mortgage repayments is likely to rise through the second half of the year and into 2024.”