- The housing market boom is still moving at ‘rapid pace’, according to April figures
- Sydney house prices rose +2.4% in April, after a +3.7% rise in March
- Expect house values to rise throughout 2021 and into 2022, but at a slower pace, says CoreLogic
Remember those apocalyptic forecasts of 30% declines in house prices a year ago? It certainly seemed extreme, yet plausible, at the time.
How times have changed.
The latest housing market survey from CoreLogic and analysis from NAB Economics has shown the housing market boom is still moving at a ‘rapid pace’. Prices are up 6.8% over the past three months, and 10.2% higher than the pandemic lows of September 2020.
House prices in April alone rose 1.8% according to CoreLogic’s national home value index, although the acceleration of house prices eased from its peak the month before.
Wages and incomes are certainly not growing at the pace of house prices, and with fewer migrants and overseas investors, there has to be a limit to the property boom.
The rising house price level was simply unsustainable and was always going to ease off. Yet house prices are still rising, and with further stimulus from tomorrow’s federal budget, they could take off again.
According to ABS data, there is evidence of a slowing of first homeowner interest during April, with a 4.8% decline in their home lending through February and March.
Around the nation, Darwin and Sydney recorded the largest increases in house prices in April, while Perth recorded the slowest rise at +0.9%.
The four smallest cities recorded double-digit annual growth, with Melbourne experiencing the worst house price growth, probably due to its longer Covid impact with subsequent lockdowns.
Houses are still outperforming units during April, with a notable shift away from higher density living, perhaps also understandable given the pandemic. Relatively weak investor sentiment and an oversupply are also impacting the unit market.
Meanwhile, auction clearance rates are strong, with the high 70%’s achieved throughout April across the combined capital cities. Houses are selling faster, with a record low median days on market of just 26 days. Median price discounting is down to 2.7%.
Sydney house prices, already the highest in the country, are still rising fast with a +2.4% rise in April, on the back of a +3.7% increase in March.
“We are also seeing stronger growth conditions across Sydney’s premium valued properties. For houses, the most expensive quarter of the market recorded a 12.2% lift in values over the past three months compared with a 7.9% rise.
“The trend is similar, but less substantial for units, with the upper quartile recording a 6.0% lift in values over the past three months while lower quartile unit values were only 2.9% higher.”
Tim Lawless, CoreLogic
Around the capitals (April 2021)
- Sydney: house prices +2.4%
- Melbourne: +1.3%
- Brisbane: +1.7%
- Adelaide: +2.0%
- Perth: +0.9%
- Hobart: +1.0%
- Darwin: +2.7%
- Canberra: +1.9%
Over in Perth, the average days on market before a sale has dropped to an all-time low of 17 days, equivalent to the top of the 2006 boom.
“Overall, although conditions remain strong, there are mounting signs the housing market has moved through a peak rate of growth. Housing values over the past six months have been rising at an unsustainable rate and are now succumbing to a gradual slowdown in demand due to worsening affordability constraints, a rise in fresh inventory, higher levels of new detached housing supply and less government stimulus.
“We are expecting housing values will continue to rise throughout 2021 and into 2022, albeit at a gradually slower pace,” said Mr Lawless.