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Tim Lawless, Research Director at CoreLogic, attributes this ongoing price growth trend primarily to supply shortages and strong demand. Despite facing multiple challenges such as rising interest rates, economic slowdowns, and market volatility, Australia's property market continues to show resilience.

As of June, national house prices further rose by 0.7%, reaching a record AUD 793,883. Sydney's prices hit historic highs, surpassing pre-pandemic peaks with a 0.5% increase to AUD 1,170,152. Similarly, Brisbane, Perth, and Adelaide saw increases of 1.2%, 1.72%, and 1.7% respectively, all exceeding previous highs.

However, Melbourne's property prices showed relative weakness, declining by 0.2% in June.

Lawless elaborated, "Despite the downward risks such as higher interest rates, cost of living pressures, affordability challenges, and tighter credit policies, house prices continue to rise."

"The real estate market has returned to a state of supply shortage, putting upward pressure on prices."

Deutsche Bank's Chief Economist, Phil O'Donaghue, indicated that record-high property prices would impact the Reserve Bank of Australia's interest rate decisions, potentially prompting another cash rate hike before August.

He emphasized, "I think another hike is justified because property transaction prices are at record highs, indicating that current interest rates are not sufficient to curb price increases."

"Data and evidence suggest that the economy needs to slow down, which means further rises in unemployment to bring inflation back to target levels."

"In the current situation, the economy is not weak enough to cause house price declines, nor is it strong enough to significantly slow down price growth. Reality proves that the economy and households are more resilient than the Reserve Bank of Australia expected."

AMP's Chief Economist, Shane Oliver, noted signs that high interest rates are starting to pressure homeowners despite overall price resilience.

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He pointed out, "Melbourne is a typical case where price rises are dominated by concerns about high interest rates, despite supply shortages and population growth driving demand."

"Thus, this sends a warning that supply shortages may not continue to drive price increases. To some extent, high interest rates are becoming a bigger issue, as seen in Melbourne where despite a population growth of 2.8% last year, house prices have seen no change due to the offsetting effects of interest rates."

"The risk is that this situation may spread to other cities. The real danger is that if we raise rates again, potential buyers who have been waiting on the sidelines may rely on parents or deplete their savings, making it impossible for them to continue buying."

In the past fiscal year, Sydney's prices rose by 6.3%, resulting in capital gains of AUD 70,000 for homeowners. Perth saw the largest increase, rising by 23.6%, adding AUD 144,768 to the wealth of homeowners.

Brisbane's property values rose by 15.8%, increasing homeowners' paper wealth by AUD 117,061, while Adelaide also saw an increase of 15.8%, adding AUD 102,719 to the median price. Melbourne's prices rose by 1.3% year-on-year.

Lawless predicted that in the coming fiscal year, the rate of price increases in Sydney and Melbourne may further slow down, but momentum in Brisbane, Perth, and Adelaide will remain strong.

He added, "We've already seen a moderation in Sydney and Melbourne, but prices continue to rise rapidly in these medium-sized capital cities."

"Perth and Brisbane show strong fundamentals, although Adelaide has slightly worsened."

"I think Sydney's situation is somewhat unreasonable because the market has become unaffordable, and all downside factors typically point to a weaker market environment."

In the past fiscal year, homeowners in Bellevue Hill, Sydney's eastern suburbs, achieved the highest capital gains with prices rising by 16.6%, increasing their incomes by AUD 1.63 million.

Properties in Clovelly, Coogee, and Bondi Beach also saw strong capital growth, ranging between AUD 427,000 and AUD 549,000.

Armadale, Camillo, and Brookdale in Perth were the fastest-growing real estate markets nationwide, with price increases exceeding 40% over the past 12 months.

In contrast, Palm Beach in Sydney's Northern Beaches saw the largest price decline, dropping by AUD 462,000, with an annual decline of 17.1%.

During the same period, residents of Bundeena in Cronulla, Vaucluse in the Eastern Suburbs, and Bayview in the Northern Beaches lost between AUD 125,000 and AUD 468,000 in property values.