- All capital cities recorded quarterly growth in housing prices according to the ABS
- The value of residential dwellings has skyrocketed this year
- Regional areas recorded strong growth due to changing consumer preferences
Affirming the results of CoreLogic last week, the Australian Bureau of Statistics (ABS) latest Residential Property Index shows housing prices have risen across all capital cities.
The weighted average of all capital cities for the quarter recorded 3.0%, and across the entire year to December 2020 the index rose 3.6%.
The total value of residential dwellings in Australia rose from $257.9B to $7,724.4B this quarter (see graph below for the overall trend).
Total value of dwelling stock
The mean price of residential dwellings rose from $21,300 to $728,500 (see the graph below for a breakdown by state).
Mean dwelling price, states, and territories, December quarter 2020
The number of residential dwellings rose by 44,100 to 10,602,700.
The strongest increases were observed in Perth, Canberra, Sydney, and Melbourne (consistent with CoreLogic’s findings).
The number of property transfers (which provides an indication of the level of sales activity for each quarter) fell in Melbourne. This reflects the effects of COVID-19 restrictions and the extended lockdowns that occurred during the September quarter.
Residential property sales activity has been strong across most regional areas.
This is due to the shift in consumer preferences caused by the pandemic, according to AMP Capital’s Chief Economist, Shane Oliver.
“In particular, the work from home phenomenon is likely to remain, albeit not five days a week for all.
This means less need to live close to work and a greater focus on lifestyle, which means greater demand for houses relative to units and in outer suburbs, smaller cities and regional areas.”
Shane Oliver, Chief Economist of AMP Capital
See our article for further commentary on why houses are outperforming unit sales.
As reported many times on The Property Tribune, ultra-low interest rates set by the Reserve Bank of Australia (RBA), in addition to a range of government incentives (such as the HomeBuilder grant scheme) have driven the surge in demand for residential property.
With the RBA set to keep interest rates low to tackle the problems with the broader economy (primarily that of high unemployment), the housing boom looks set to continue.
