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CoreLogic’s National Home Value Index recorded a 2.8% increase in March, the largest monthly increase in values since October 1988, when values rose 3.2%.
It is the fastest growth rate in 32 years.
The boom in house prices remained widespread, with values increasing by at least 1.4% in each of the capital cities and “rest of state” regions during the month.
CoreLogic Research Director Tim Lawless said Sydney led the way in March, with values reaching 3.7%, 6.7% higher than in the first quarter of 2021.
“The last time Sydney home values recorded such a strong quarterly trend was in June / July 2015. Following this brief surge, the pace of growth slowed rapidly as the limits on investor loans were reduced. were imposed to slow down the market, ”Mr. Lawless said.
CoreLogic’s combined capital index was up 2.8% in March, compared to the 2.5% gain in the combined regional index.
“Housing values in regional areas are 11.4% higher over the past year, demonstrating the earlier stronger growth trend; the capital’s values are now 4.8% higher on an annual basis with the acceleration of growth evident in March. “
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Sydney and Melbourne have now fully recovered from their 2020 downturns and have now started to overtake smaller capitals that had previously outperformed them.
House prices in Sydney are now 2.6% higher than their peak in July 2017, after values fell 14.9% through May 2019 and 2.9% during the pandemic.
Melbourne prices are also at an all time high after recovering from their 11.1% drop from 2017 to 2019 and the 5.6% drop seen through COVID.
March also marked the first time in a year that growth in the capital’s housing markets have overtaken regional markets.
Related: Top 10 Most Affordable Regional Real Estate Markets.
Victoria was the only state where regional areas outperformed the capital, with Victorian regional values up 2.6%, compared to a 2.6% increase in Melbourne.
Source: CoreLogic
Demand greatly exceeds supply
The surge in house prices is supported by a disconnect between demand and supply, with total listings published remaining extremely low in March.
The total number of national registrations showed that the announced stock levels were 25.5% lower than the five-year average during the four weeks until March 28.
However, in the past four weeks, new registrations nationwide are up 8.1% from a year ago and 3% above the five-year average.
Mr Lawless said the main reason the total number of listings remained so low was that demand from buyers consistently outweighed the newly announced offer.
“The ratio of sales to new listings is around 1.1, which means that for every new listing added to the market, 1.1 homes are sold. Such a rapid absorption rate keeps overall inventory levels low and strengthens FOMO sentiment among buyers, ”he said.
A frenetic auction market also supports strong conditions, with the last week of March on busiest auction week in three years and real estate auction prices reaching record highs.
Estimated selling activity remained high in March, with CoreLogic estimating the number of home sales in the month to be 21.9% higher than a year ago.
This was led by Perth, which recorded an estimated turnover of 42.2%, or around 3,200 sales.
Rental markets remain diversified
CoreLogic found that there were significant differences between regions and types of housing in the rental market.
Geographically, Darwin and Perth had the tightest rental markets, with house and unit rents both registering double-digit annual growth.
But rents are rising at a record pace in Perth and Darwin, with a quarterly trend up 5.9% and 7.7% respectively.
“Rental prices in Perth and Darwin started to rise in September of last year. Monthly rental growth in Perth has accelerated rapidly from an already high level of 1.1% in September 2020 to 2.0% in March 2021, ”Lawless said.
“Darwin’s rents have grown an average of 2.1% per month over the past seven months, including a 2.4% increase in March 2021.”
Despite the strong growth, rents in both cities are far from their peak, with Perth 16% below its 2013 peak and Darwin 24.6% below the 2014 peak.
Elsewhere, the Melbourne and Sydney unit markets continue to be a drag without migration abroad and border closures.
However, Mr Lawless said conditions were stabilizing.
“Unit rents in Sydney have shown a subtle increase over the past three months, while unit rents in Melbourne have remained firm over the same period,” he said.
“The improvement comes after a long decline, but a significant improvement in rental conditions will likely depend on the return of international students and visitors to bolster demand for downtown rental housing. “
Photo by Aldrino on Unsplash
The entire market was not taken into account in the selection of the above products. Instead, a smaller part of the market has been envisioned, which includes the retail products of at least the Big Four banks, the Top 10 customer-owned institutions, and Australia’s largest non-banks:
Products from some vendors may not be available in all states. To be taken into account, the product and the price must be clearly published on the website of the supplier of the product.
In the interest of full disclosure, Savings.com.au, Performance Drive, and Loans.com.au are part of the Firstmac group of companies. To learn more about how Savings.com.au handles potential conflicts of interest, as well as how we are paid, please click on the links on the website.
*The Comparison rate is based on a loan of $ 150,000 over 25 years. Please note: this comparison rate is only true for this example and may not include all fees and charges. Different terms, fees, or other loan amounts may result in a different comparison rate.
