Property Market Continues To Run Hot
Published 4:54 am 5 May 2021
New report shows prices are up 20 per cent in key markets
The hottest national property market in years is continuing to produce outstanding results for vendors, with prices surging in every capital city in Australia.
The latest quarterly Domain House Price Report, produced by domain.com.au, shows that every capital city in the country has now recorded two consecutive quarters of growth, with six of eight state and territory capitals reaching record-high median prices.
“It’s the first time we’ve got two consecutive quarters of price growth for all capitals since 2009,” says Domain Senior Research Analyst Dr Nicola Powell. “It’s reminiscent of that period post-GFC when all capitals went into an upswing. Even though we didn’t see a decline due to COVID, we’ve seen an acceleration of home buyers in the market that perhaps prior to COVID wouldn’t have been in the market.”
Canberra is leading the charge with prices surging up to 20 per cent in just 12 months – with a 10 per cent upswing in the last quarter. Median house prices in the capital have hit $930,000. “Another quarter with similar growth would propel Canberra to a $1 million median house price,” Dr Powell says. “This is the steepest annual increase in 17 years.”
Hobart is now outstripping Perth with a rise of nearly 16 per cent to put its median house prices up to $601,000 in the latest quarter, up from $519,000 for the same period last year. In fact, Hobart’s house prices have nearly doubled in just five years – up 73 per cent since 2016. This is in large part fuelled by interstate buyers relocating and perceiving Hobart as good value when compared to Melbourne and Sydney in particular.
Sydney was already seen as unaffordable and has become even more so with its median house price hitting the $1.3 million mark this quarter with Melbourne’s likely to push past $1 million in the next quarter. It is now at $975,000, a rise of 4.8 per cent since the December quarter of 2020.
Perth and Darwin, supported by the resurgent mining boom, have also recorded highs this quarter, with their prices going up 9.2 per cent and 8.4 per cent respectively.
“Perth’s rebound in prices is likely to continue,” Dr Powell says. With the population growth continuing [the prediction is for] more investor activity now that the state government’s rental moratorium has concluded.
|MAR 2021 MEDIAN||DEC 2020 MEDIAN||MAR 2020 MEDIAN||QOQ GROWTH||YOY GROWTH|
The unprecedented rise in house values is due to a number of factors, including a lack of stock which means there is more competition for that which is available. Combined with low interest rates and schemes like the HomeBuilder grant, it has created a perfect storm, according to Dr Powell.
“The rate of growth is rare, particularly when some [capitals] have posted their strongest growth on record,” Dr Powell told domain.com.au. “It’s not sustainable, that kind of increase and there are various things that will affect that level of growth. One is affordability. It will slow down the number of people looking to purchase,”
“[The second is] sellers will be brought to market by strong conditions. One of the biggest factors driving up factors is the lack of supply combined with the record levels of housing finance. It just hasn’t been able to keep pace with the number of buyers.”
However, those looking to invest now should perhaps consider units, she said.
Only Melbourne has recorded a record high in this sector, while Sydney’s unit prices are still 4.7 per cent below their peak of June 2017.
In the other capitals, unit prices are declining, especially in Brisbane where the gap between unit and house prices is at a record high.