- Last month's 1% rise was slower than the 1.3% recorded in November
- Growth peaked in March, at 2.8%
- Adelaide, Queensland and other regional markets still experiencing growth, while Sydney and Melbourne has slowed down
Despite a slowdown towards the end of the year, Australian house prices rose by 22.1% throughout 2021, data released today by CoreLogic shows.
House prices rose by 1% in December, slower than the 1.3% rise witnessed in November, and a far cry from the high of 2.8% recorded in March.
With the slowdown, growth is varying across the capital cities and regional areas. Melbourne saw a 0.1% fall in house prices – the first monthly fall since October 2020 – while Brisbane saw a 2.9% surge.
Brisbane, along with Adelaide and regional Queensland, are the only regions where growth doesn’t appear to be deaccelerating.
Tim Lawless, CoreLogic’s research director, noted that these regions show less affordability challenges in relation to the larger markets such as Sydney and Melbourne, hence the demand remaining high.
“Additionally, we haven’t seen the same level of supply response seen in other regions, with the trend in advertised supply remaining well below average in these markets,” Mr Lawless said.
“A surge in freshly advertised listings through December has been a key factor in taking some heat out of the Melbourne and Sydney housing markets, along with some demand headwinds caused by significant affordability constraints and negative interstate migration.”
Regional still booming
Despite the slowdown, regional housing values saw a 2.2% rise last month, the highest in nine months. In particular, Queensland saw a 2.4% rise. Over the year, New South Wales was the strongest regional market, recording 29.8% growth followed by Tasmania with 29.5% growth.
More specifically, the Southern Highlands and Shoalhaven regions recorded 37.7% growth.
Mr Lawless added that the upper quartile is leading the slowdown.
“We have seen this trend in previous growth cycles, where more expensive housing markets have shown greater levels of volatility; housing values tend to rise more through the upswing but record a larger decline through the down phase of the cycle,” he said.
However, he noted a two-speed housing market has emerged across the capitals. Sydney, Melbourne and Perth are recording lower growth while Adelaide and Brisbane have gathered momentum.
In Melbourne and Sydney, this can be explained by the deposit hurdle and increased supply. Perth could be explained by lack of migration due to extended closures of state borders.
“The number of homes available to purchase has been a key factor underlying the trend in housing values. Cities where advertised stock levels are above average or close to normal, such as Melbourne and Sydney, have shown a more obvious slow down relative to cities with persistently low advertised supply, like Brisbane and Adelaide,” Mr Lawless said.
Nonetheless, inventory is low – advertised stock levels are 35.9% below the five-year average.
