Australian home values rise at fastest rate in 17 years
Australian home values climbed 2.1 per cent higher nationally in February, the largest month-on-month change since August 2003, according to the latest CoreLogic data.
CoreLogic’s national home value index for February showed prices rose across each of the capital cities and rest-of-state regions in February, demonstrating the breadth of the housing upswing.
Sydney and Melbourne were among the strongest performing markets, recording a 2.5 per cent and 2.1 per cent lift in home values over the month respectively, as the nation’s two largest cities made up ground after comparatively weaker performances through 2020.
Hobart recorded a 2.5 per cent rise in January, followed by Canberra, which rose by 1.9 per cent, Brisbane and Perth saw 1.5 per cent growth, Adelaide reported 0.9 per cent and Darwin on 0.7 per cent.
The quarterly trend is still favouring smaller cities. Darwin housing values increased by 5.5 per cent over the past three months, Hobart values rose 4.8 per cent and Perth was up 4.2 per cent.
According to CoreLogic, a range of factors including record low mortgage rates, improving economic conditions, government incentives and low advertised supply levels, have combined to create a broad-based boom in Australia’s housing market.
CoreLogic’s research director Tim Lawless said a synchronised growth phase of this scale had not been witnessed in Australia for more than a decade.
“The last time we saw a sustained period where every capital city and rest-of-state region was rising in value was mid-2009 through to early 2010, as post-GFC stimulus fueled buyer demand,” Mr Lawless said.
Mr Lawless said it was currently unclear whether Sydney and Melbourne’s new-found growth could be sustained, with both cities recording values below their earlier peaks.
“Both cities are still recording values below their earlier peaks, however at this current rate of appreciation it won’t be long before Australia’s two most expensive capital city markets are moving through new record highs.
“With household incomes expected to remain subdued and stimulus winding down, it is likely affordability will once again become a challenge in these cities,” Mr Lawless said.
Regional markets, which were up by 2.1 per cent over the month, have continued to show a higher rate of capital gain relative to the capital cities (up by 2 per cent), however the performance gap has narrowed compared with the earlier phase of the growth cycle.
Unit markets continued to perform weaker when compared to detached housing, with CoreLogic’s combined capitals index recording a rise in house values of 4.4 per cent over the past three months, more than three times higher than its unit counterparts (1.4 per cent).
Advertised supply remains around record low levels, with buyer demand rising swiftly to above average levels and this mismatch between demand and supply is forecast to remain a feature of the housing market for some time.