It’s been a stellar 12 prices across the nation rose by 1.5% in August, taking the annual growth rate to an impressive 18.4%. Once again, the smaller capital cities of Canberra and Hobart lead the house , gaining in value by 2.3% and 2.2%, respectively. While Brisbane also continues to perform enormously, increasing by 2.0% in August. Australia’s two largest the most obstacles in the form of ongoing lockdowns and restrictions. However, they, too, saw another month of growth, with Sydney dwelling values increasing by 1.8% and Melbourne by 1.2%.across the country. However, there are signs that the bull run is slowing down. According to the latest data from CoreLogic, house
While the annual growth. Looking back to March 2021, we saw growth of 2.8% across the country, led by Sydney, where dwelling values were up 3.7%. While change is still positive, we will now see lower levels of growth, particularly in our most expensive cities, where . Head of Research at CoreLogic, Tim Lawless, believes worsening affordability is causing more of an impact than the ongoing lockdowns.“Housing over the past year, creating a more significant barrier to entry for those who don’t yet own a home.”
“Lockdowns are having a clear properties available for purchase is central to the upwards pressure on housing values.” According to Tim Lawless, the growth in housing values has been the strongest since 1989, which interestingly coincided with a period of record inflation. “Through the late 1980s, the annual pace of national home value appreciation was as high as 31%, so the market isn’t quite in unprecedented territory. The annual growth rate is currently trending higher; it is 3.6 times higher than the thirty-year average annual growth rate.”sentiment. However, to date, the restrictions have resulted in falling advertised listings and, to a lesser extent, fewer home sales, with less impact on the momentum. It’s likely the ongoing shortage of
Listings Remain Tight
One of the major sources of upward pressure on houseto be the low levels of stock on the market. in early 2020, and those prior levels have never really recovered. Thanks predominately to lockdowns, the number of new listings through August dropped -5.8% below the five-year average, and total active listings were -29.4% below average. While listings are lower, Mr. Lawless says transactions are still taking place. “Although there has recently been a trend towards fewer buyers, the past three months has seen the sales remain 30% above the five-year average at a time when active listings are -29% below average,” Mr. Lawless said
“We are still seeing a disconnect between advertised supply and housing demand, even in the cities where lockdown restrictions are active, which is keeping upward pressure on housing prices despite challenges faced by both buyers and sellers.” With spring arriving, we would normally starting to rise dramatically, and there is some evidence of this happening in Brisbane, Adelaide, Perth, and Hobart. However, the same cannot be said for the cities where . The trend in new weak in Sydney, Melbourne, and Canberra. When lockdowns do ease in these cities, there is likely to be a certain amount of pent-up supply that will hit the market and reduce the pressure to some degree.
With record-low interest rates and no sign of any changes ahead from the RBA, we are still likely to see house prices continue to drift higher. However, with affordability issues now starting to present themselves in Sydney and Melbourne, and other in-demand areas, oCoreLogicc also believes we should expect slowing growth ahead. This sentiment was also echoed recently by ANZ, who suggested the outlook for 2021 was still strong, but in the future, the increase in 2022 will return to more normal levels of around 5% per annum in most major cities.