According to CoreLogic’s national home value index, the Australian housing market is continuing to rise at once-in-a-generation speeds.
Over the month of March, the index recorded a 2.8% rise, making it the fastest appreciation rate since October 1988, when a 3.2% jump occurred.
Sydney is leading the country in growth, with the harbor city up 3.7% across March and a total of 6.7% for the first quarter of the year. This huge quarterly jump is the strongest in Sydney since mid-2015, and now represents a new record-high.
Hobart, Melbourne, Canberra, and Brisbane join Sydney as capitals with record-high numbers, and there have been no price decreases in any capital cities during the last month, quarter, and yearly reports.
Regional properties have also benefited from a scorching hot market, with combined regional areas up 2.5 per cent in March, 6% quarterly, and 11.4% for the year.
“Housing values in regional areas are 11.4% higher over the past year, demonstrating the earlier stronger growth trend,” CoreLogic’s research director Tim Lawless said.
However, this quarter was the first time that that capital city growth was higher than regional areas. In March, only Victorian regional properties outpaced the growth of the major city in the state, with regional prices up 2.6% compared with 2.4% in Melbourne.
Across the country, houses were still outperforming units, but Sydney unit prices in February and March rose in value, and in Melbourne, unit prices have been steadily rising since October 2020.
Houses had a 3.0% gain in March, while unit values were up 1.9%. When examining the combined capital stats, houses had a quarterly growth rate (6.5%) that was more than double of units (3.1%).
The national value home index from CoreLogic also reported that Australian housing markets are continuing to respond to a broad range of influencing factors, including record-low interest rates and the economic recovery from the COVID-19 pandemic positively.
In response, Australians are feeling optimistic and confident that buying now is the right move for the future.
CoreLogic’s head of Australian research Eliza Owen believes that unlike previous record high prices in 2017, its owner-occupiers dominating the market instead of investors.
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“That was a time when the property market was rising very rapidly off the back of a boom in investor lending,” Ms. Owen said.
“It’s a little different this time around with a greater owner-occupier presence in the market.”
Whether prices will continue to rise as the year progresses is a big question.
REA Group’s director of Research, Cameron Kusher, expects prices to keep rising short-term, but don’t be surprised if the index flattens towards the fourth quarter.
“[An] increasing number of buyers have now purchased, and price increases mean that housing has become less affordable,” Mr. Kusher said in the REA Insights Housing Market Indicators Report.
“We don’t expect the market to come to a grinding halt, prices are expected to keep rising, but we expect the second half of this year will not see the market quite as strong as it has been over the first half.
“Sales volumes have eased back from highs, as have search volumes, and I would expect a further moderation in sales over the coming weeks.”
Words by Rimas Veselis
- National home value index rises at its fastest pace in 32 years, April 1st
- National home value index full report, April 1st
- House prices rising at fastest pace in 32 years as listings can’t keep up with demand, March 31st
- Housing demand cools but prices stay hot, May 14th
- REA Insights Housing Market Indicators Report May 2021, May 13th
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