- House prices have risen by $2 trillion over the past 12 months alone
- Sales volumes rose to 614,635 over the past 12 months
- St Andrews Beach was the top suburb based on median house price rises over the past year
Without a doubt, 2021 will go down in history as one of the most extraordinary years for the Australian housing market.
In the midst of a once-in-a-hundred years pandemic, house prices continued to soar with the value of residential real estate rising by over $2.2 trillion in just 12 months to over $9 trillion.
To put this rise into perspective, Australia’s GDP – or economic output – was about $1.3 trillion this year.
According to CoreLogic, sales volumes also rose to 614,635 over the past 12 months – the highest in 18 years.
As well reported, dwelling values rose by 22.2% in November, the highest increase since 1989.
“Strong housing market performance over the year was driven by multiple factors, including low interest rates, fiscal and institutional support for households, high household savings and relatively low levels of advertised stock,” said Eliza Owen of CoreLogic.
“Rates of housing turnover had also been relatively low for some years before these factors boosted housing demand, which may also explain the elevated volume of sales in the past 12 months, which at November was 32.6% above the decade annual average.”
Who were the best performers?
The best performing suburb with the highest median house value for 2021 was Bellevue Hill in Sydney’s eastern suburbs. The harbourside suburb is 5 kilometres from Sydney’s CBD and is known for its luxurious properties.
The highest 12-month change in value suburbs was St Andrews Beach, located along the Mornington Peninsula, where prices rose by 58.6%. Perhaps Melbournians who were in a position to do so eagerly moved away from their lockdown-ridden city.
The highest 12-month change in house rents is Bicheno in south-eastern Tasmania, which saw a 40.9% rise. Even before the pandemic, houses across the state had been rising for some time, with Bicheno – famous for its penguins – no exemption.
The suburbs with the lowest median values ad rental yield notably were highly correlated.
Kambalda East in outback Western Australia – about 60 kilometres from Kalgoorlie – saw the lowest median values of houses, reaching $90,155. Kambalda West on the other hand saw the highest rental yields, reaching 14.7%. Of course, these two suburbs have been impacted by the mining boom.
“The popularity of regional Australia is reflected in many aspects of the Best of the Best report for 2021,” added Ms Owen.
“This may in part be attributable to how COVID-19 continued to shape demand trends, with coastal or leafy settings being more desirable as some workers were empowered to work remotely.”
Has the market finally peaked?
When providing an outlook for next year, Ms Owen acknowledged the likelihood that both sales and listings have likely already peaked.
“The constraints of slightly tighter credit conditions, the erosion of housing affordability and a higher level of listings being added to the market are expected to see softer growth rates across property values in 2022,” she said.
“These forces are an accumulation of headwinds for property market performance. Softer growth rates are likely to coincide with fewer purchases, where sales and listings activity eventually move with momentum in price.”
