This article is from the Australian Property Journal archive
GROWING by 20.3% from this time last year, buoyed by regional growth, national dwelling prices are increasing at a rate not seen in 32 year.
According to the latest data from CoreLogic, capital city average dwelling prices were up again over September, bumping up 1.5% over the month, 19.5% for the year and up 15% on the previous record high of September 2017.
Combined regional prices grew by 1.7% over September, up 23.1% compared to this time last year.
While, excluding Perth and Darwin, all capital cities recorded levels over the month, with Hobart and Canberra recording the strongest results.
Hobart saw a monthly increase of 2.3%, as well as the most significant yearly change at 26.8%. While Canberra saw a 2% increase over September and a 24.4% yearly increase.
“Sydney and Melbourne continue to behave very differently in response to their respective lockdowns. Both have seen listings slow but less so in Sydney where demand has also held up better suggesting greater confidence in the economic and property market outlook,” said Shane Oliver, chief economist at AMP Capital.
In Sydney, prices are up 1.9% even with the city still under a many months long lockdown. Compared to last year, Sydney’s prices are up 23.6%.
Meanwhile in Melbourne, price growth has continued to slow, climbing by 0.8% over the month or 15% for the previous 12 months.
“Melbourne has recently seen a bigger plunge in activity suggesting far less confidence in the economic and property market outlook in Melbourne, albeit the property market is stronger than it was last year and clearances have rebounded as restrictions on property inspections were eased,” said Oliver.
In Brisbane and Adelaide prices grew a respective 1.8% and 1.9% for the month and 19.9% and 19.1% for the year.
Darwin saw the slightest increase for the month, up 0.1%, though this reflects stronger growth for the 12 months to September at 20.2%.
In Perth, prices grew by 0.3% for the month. Following a correction in CoreLogic’s hedonic index, where Perth was undervalued by 8.4%, with the city’s annual growth being reported at 10.8% for July, it is now at 18.1% in September.
“The turnaround of the WA market has been remarkably fast considering the downturn only hit rock bottom last year. We expect this recovery to continue throughout the remainder of 2021 and into 2022,” said Damian Collins, president of REIWA.
With Perth’s median house sale price at $520,000 in September, 71 suburbs across the city reported price growth over the month.
Cooloongup topped these suburbs in rate of growth, experiencing a 4.5% increase to $320,000, followed by Bicton which grew by 4% to $1.25 million and City Beach which increased by 3.4% to $2.175 million.
While the city saw an increase of listings for sale for the month, up 2% to 8,368, this was down 21% from this time in 2020. Listings for rent continue to be limited, at just 2,253.
“The outcome of the Residential Tenancies Act review, which is currently underway, needs to be fair for all parties. We must ensure investors aren’t disincentivised from buying in WA or this will have a knock-on effect to tenants further reducing stock and causing rents to rise,” added Collins.
Nationally, houses continue to outpace units, with average capital city growth for houses at 1.6% over the month, while units saw 0.9% growth, reflecting a respective 22.7% and 10.4% yearly increase.
“Capital city houses are continuing see stronger price growth than units, although the performance gap is expected to narrow as deteriorating affordability for houses is starting to push more buyers back into units,” said Oliver.
Price growth is forecast to steady over 2022, as affordability shrinks, consumer spending returns to pre-COVID patterns and APRA likely imposes macro prudential controls.
“Still ultra-low mortgage rates and an ongoing relatively low level of homes for sale along with a resumption of economic and jobs market recovery once lockdowns end point to further home price increases ahead, albeit at a slowing rate,” concluded Oliver.
