Property prices go through the roof
UNPRECEDENTED buyer activity and low interest rates have seen Australian housing values grow at the fastest rate in 17 years.
The national home value index rose 2.1 per cent in February in the largest monthly increase seen since August 2003. Buyers have been motivated by low mortgage rates, government incentives, a limited supply of homes and a fear of missing out.
Property researcher CoreLogic revealed Sydney dwelling prices rose 2.5 per cent in the past month to $895,933, which along with Hobart was the largest monthly increase of any Australian capital city.
Corelogic research director Tim Lawless said it was the strongest housing market in more than a decade.
“The last time we saw a sustained period where every capital city and rest of state region was rising in value was mid-2009 through to early 2010,” he said.
The Corelogic February Home Value Index revealed the average Sydney freestanding house became $31,836 more expensive in the past 28 days to $1,061,229. The 3 per cent monthly growth netted homeowners close to $8000 a week. House prices in Sydney are up 3.6 per cent for the quarter and 2.8 per cent from this time last year.
Mr Lawless said it was unclear if the phenomenal growth could be sustained into the future.
“At this current rate of appreciation it won’t be long before Australia’s most expensive capital city markets are moving through new record highs,” he said.
“With household incomes expected to remain subdued and stimulus winding down, it is likely affordability will once again become a challenge in these cities.”
After a sluggish 2020, apartments have started to see a noticeable uplift in values following 1.2 per cent growth to $738,254 in February.
Mr Lawless said a limited supply of homes had played a major role in the fast rise in house prices.
“Housing inventory is around record lows for this time of the year and buyer demand is well above average,” he said.
In the Melbourne suburb of Northcote, Marie-ann Taylor and her husband Andrew said they were feeling “very confident” about selling their home of 16 years, which will be auctioned with a $1.7-$1.8m price guide.
However the couple were less optimistic about finding a suitable replacement for their growing family.
“We’re mainly keen to secure a piece of land in a good location,” Ms Taylor said.