Housing Market Boom In Australia
- Posted By Pasang Sherpa
In May, housing markets all around Australia increased by 2.2%, according to CoreLogic's national Home Value Index. The increase in May was higher than April's (1.8%), but it was lower than the 32-year peak set in March, when prices jumped 2.8%.
Tim Lawless, CoreLogic's research director, notes that growth circumstances were wide across the board, both geographically and in terms of dwelling types and valuation segments.
“Values were up by more than 1% across every capital city over the month, with both house and unit values lifting across the board. Of the 334 SA3 sub-regions analysed by CoreLogic, 97% have recorded a lift in housing values over the past three months. Such a synchronized upswing is an absolute rarity across Australia’s diverse array of housing markets.”
For the second time in three months, house prices in the capital cities have surpassed regional markets in terms of increase. In May, the combined capital city index increased by 2.3%, while the combined regional regions index increased by 2.0%.
The monthly change in home values varied from a 1.1% increase in Perth to a 3.2% increase in Hobart throughout the major cities. Conditions were more varied in non-capital city regions. Regional NSW had the highest monthly growth (2.5%), while regional WA had the lowest (-0.1% ).
Mr Lawless emphasized that the fundamentals supporting the property market's success remain in place. “The combination of improving economic conditions and low interest rates is continuing to support consumer confidence which, in turn has created persistently strong demand for housing. At the same time, advertised supply remains well below average. This imbalance between demand and supply is continuing to create urgency amongst buyers, contributing to the upwards pressure on housing prices.
“Despite the consistently strong headline results, the underlying trends have shifted over the past year,” Mr Lawless said.
“The most expensive end of the market is now driving the highest rate of price appreciation across most of the capital cities, whereas early in the growth cycle it was the most affordable end of the market that was the strongest.
“From a geographic perspective, it was the smaller capital cities that led the housing market out of the COVID slump, but now Sydney has risen through the ranks to record the largest capital gain over the past three months with values up 9.3%.”
Despite the fact that Sydney is once again the fastest-growing city in terms of house prices, the yearly growth rate in the minor capitals, as well as regional New South Wales and Regional Tasmania, is typically higher. Darwin broke above the 20% annual growth barrier in May, with values now up 20.3% in the last year. This is the strongest yearly gain on record for Darwin residents. Housing values in Regional New South Wales are up 18.6%, while they are up 18.1% in Regional Tasmania.
On the opposite end of the scale, the poorest housing markets in the last year have been in Regional Western Australia (0.0%) and Melbourne (5.0%), where the protracted lockdown has caused a more severe impact on yearly growth.
SOURCE:
Lawless, T., 2021. corelogic.com.au. [Online]
Available at: https://www.corelogic.com.au/news/australias-housing-boom-rolls-national-home-values-lifting-another-22-may?utm_medium=email&utm_source=newsletter&utm_campaign=au-res-hvi-2021-jun