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Sunday, July 25, 2021

Australian property prices score lofty gains in 2020/21

Australian residential property prices rose 13.5 per cent over the 2020/21 financial year, the highest annual growth rate since 2004 and when the market was unwinding from the housing boom of the early 2000s.

The CoreLogic home value index rose 1.9 per cent in June, with prices rising in all capital cities, led by a three per cent gain in Hobart.

Over the year, house prices rose 15.6 per cent, compared to units that increased by 6.8 per cent.

Darwin posted the highest annual rate in dwelling values, increasing by 21 per cent, followed by a 19.6 per cent rise in Hobart.

CoreLogic head of research Eliza Owen said there were plenty of factors driving up Australian property prices through the first six months of 2021 and before the recent uncertainty of growing COVID-19 cases emerged across the country.

“However, there are some markets where performance is starting to ease more notably,” Ms Owen said.

Continued low mortgage rates, falling unemployment, elevated consumer confidence, the accumulation of savings through the COVID restrictions last year and relatively low advertised housing stock all fuelled strong demand conditions.

Federal government initiatives like the First Home Loan Deposit Scheme and the New Home Guarantee have also been supportive.

The government has released an additional 30,000 places from July 1 under these two schemes, as well as the new Family Home Guarantee to eligible single parents with children to build a new home or purchase an existing home with a deposit of as little as two per cent.

“Our data shows CBA customers who have used one of these home buyer initiatives have been able to enter the property market nearly five years earlier on average than they would if they saved for the standard 20 per cent deposit,” Commonwealth Bank’s Michael Baumann said.

However, the CoreLogic data shows that across the capital cities, there is a loss of momentum across Perth and Darwin, while softer growth rates are also emerging at the high end of the market.

“This easing in the pace of growth at the top end of the market is another clear signs of a shift in momentum,” Ms Owen said.

“The rest of the market tends to follow movements at the high end, and this is the first time in nine months that the high-tier growth rate has not accelerated.”

CORELOGIC NATIONAL HOME VALUE INDEX FOR JUNE

(month, annual)

National – up 1.9 per cent per cent, up 13.5 per cent

Sydney – up 2.6 per cent, up 15 per cent

Melbourne – up 1.5 per cent, up 7.7 per cent

Brisbane – up 1.9 per cent, up 13.2 per cent

Adelaide – up 1.6 per cent, up 13.9 per cent

Perth – up 0.2 per cent, up 9.8 per cent

Hobart – up 3 per cent, up 19.6 per cent

Darwin – up 0.8 per cent, up 21 per cent

Canberra – up 2.3 per cent, up 18.1 per cent

Combined capitals – up 1.9 per cent, up 12.4 per cent

Combined regional – up 2 per cent, up 17.7 per cent

(Source: CoreLogic)

AAP

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