- Over the past 12 months, values have risen by 16.2%
- Represents the fastest 12-month growth since Feb 2004
- Signs of slowing down, especially in Sydney
Australian house values continue to rise, increasing by 14.1% during 2021 already and 16.2% higher over the past twelve months, according to CoreLogic’s national home value index.
July saw a monthly increase of 1.6% – less than June which saw a 1.9% rise, and far less than the 2.8% recorded in March, the fastest monthly increase since 1988.
While the market remains strong, it is showing signs of losing steam, according to CoreLogic’s research director, Tim Lawless.
“The 16.1% lift in national housing values over the past year is the fastest pace of annual growth since February 2004, however, the monthly growth rate has been trending lower since March this year.”
Mr Lawless said the lower rate can be attributed to an array of factors such as the expiry of Covid-related fiscal support earlier this year such as HomeBuilder and JobKeeper.
“With dwelling values rising more in a month than incomes are rising in a year, housing is moving out of reach for many members of the community…it is, however, encouraging to see additional measures being rolled out for households and businesses as the latest COVID outbreak worsens.”
Tim Lawless, CoreLogic
Mr Lawless said record-low mortgage rates and the Reserve Bank’s assurance the cash rate will remain at this level for an extended period of time will maintain the demand for housing.
“Dwelling sales are tracking approximately 40% above the five-year average while active listings remain about -26% below the five-year average.
“The mismatch between demand and advertised supply remains a key factor placing upwards pressure on housing prices.”
While the pace of dwelling price appreciation has slowed across all the capital cities, Sydney recorded the sharpest reduction, with dwellings only increasing by 2% last month.
“Sydney is the most expensive capital city by some margin and it has also been the city where values have risen the most over the first seven months of the year.
“Worsening affordability is likely a key contributing factor in the slowdown here, along with the negative impact on consumer sentiment as the city moves through an extended lockdown period.”
In the regional markets, growth continues to remain high with regional markets up 14.5% this year.
