The robustshows no sign of slowing down, with the latest data from CoreLogic indicating dwelling values are rising at the fastest rate in 32 years. According to CoreLogic, rose by 2.8% in March, the most significant increase since October 1988. All in March, led by Sydney, with a robust 3.7% increase in dwelling values. At the same time, the weakest capital city was Adelaide, which still saw 1.5% growth. Regional Australia also continues to perform strongly, increasing value by 2.5%.
The lasthouse prices rose this quickly in Sydney was in the previous boom in 2015, before the credit tightening policies introduced by APRA. In March, the strong result means that both Sydney and Melbourne have fully recovered from the slight COVID-induced downturn in mid-2020. Sydney prices are back above their 2017 highs by 2.6% and have fully recovered from the -14.9% boom. Similarly, Melbourne are fully recovered and are back at record-high levels.
We are also starting to see the larger capital cities overtake the smaller capitals that had previously seen solid growth—the first quarter also closed with substantial, with dwelling values up by 5.8% nationally. In terms of the units vs. houses, there is still clearly more robust demand for lower-density property as places increased by twice as much as units over the first quarter. At the same time, the upper end of the . In March, the upper quartile of homes increased in value by 3.7%, outpacing the lower quartile, which showed a 1.6% increase.
Tight Listings Continue for Now
The substantial gains continue to come from record-low interest rates and tight supply. The RBA has made it clear interest rates are likely to remain low for the while listings are also at historically low levels.
Graph of the Cash Rate Target
Total listings nationwide are still a5% below the five-year average. However, that could be slowly starting to change as new listings are on the rise as homeowners gain confidence and look to capitalize on the state of the market. New listings are currently 3% above the five-year average and appear to be trending higher. However, CoreLogic notes that things will likely slow down from the current record-setting pace. For the time being, markets across the country are favoring sellers.
So far, the strong demand from buyers has not been met by increases in inventory levels. However, the sellers will return to the market at some point, as we’ve already started to see new listings on the rise. Similarly, there has been a large influx of first-home buyers, whose decision to purchase a property has likely been by the range of Government incentives on offer. If they haven’t already, many of these incentives are set to this year
While it has been stated that interest rates are likely to remain low for somecontinues to overheat, there is also some possibility that we could also see tighter credit policies, which, as we know, can have an immediate impact on demand. For now, house to rise, according to CoreLogic. However, we should expect the pace of growth to slow down.