- Dwelling values continue to rise, albeit at a slower pace
- Darwin was the only capital city to record a decline in home values
- Values have increased annually by 18.4% - about $1,990 a week
Housing values have continued to record a broad-based rise, despite lockdown disruptions affecting much of the country.
Dwelling values rose 1.5% in August, well above the average growth rate but was the lowest monthly rise since January, according to the figures from CoreLogic.
The lift occurred in every capital city except for Darwin which saw a marginal 0.1% decline in home values. However, CoreLogic advised that the results have been withheld in Western Australia pending a resolution over housing market measurement.
However, based on Perth’s current property growth cycle being double that compared to the last housing boom, it would be wise to assume prices rose in August in the west.
The home value index results confirm that the rate of growth is moderating since the peak in March, where home values rose by 2.8% in the month alone, driven by Sydney’s 3.7% rise.
Tim Lawless, CoreLogic’s research director, said while the ongoing lockdowns may have influenced the slower growth, worsening affordability constraints are likely the biggest contributor, especially given wages are rising at an average annual rate of 1.7%.
“Housing prices have risen almost 11 times faster than wages growth over the past year, creating a more significant barrier to entry for those who don’t yet own a home,” explained Mr Lawless.
“Lockdowns are having a clear impact on consumer sentiment, however to date the restrictions have resulted in falling advertised listings and, to a lesser extent, fewer home sales, with less impact on price growth momentum.
Tim Lawless, CoreLogic
“It’s likely the ongoing shortage of properties available for purchase is central to the upwards pressure on housing values.”
The August update has taken Australian housing values to a level 15.8% higher compared to the start of the calendar year and 18.4% above levels seen a year ago. This increase equates to an annual increase of $103,400 or $1,990 a week.
This is the fastest annual pace of growth since the year ending July 1989.
“Through the late 1980s, the annual pace of national home value appreciation was as high as 31%, so the [current] market isn’t quite in unprecedented territory.
“The annual growth rate at the moment is trending higher, in fact, it is 3.6 times higher than the thirty-year average rate of annual growth.”
Mr Lawless added that the performance gap between houses and units appears to be narrowing. During the first quarter of the year, capital city house values were rising by approximately 1.1% faster than units monthly. By August, this gap was reduced to 0.7%.