Australian property prices rise at fastest rate in 17 years
The latest CoreLogic data reveals national home values had the largest month-on-month increase in 17 years, surging +2.1 per cent to a median of $598,884.
CoreLogic research director, Tim Lawless, describes the Australian housing market as “in the midst of a broad-based boom” and attributes the growth to record-low interest rates, improving economic conditions, government stimulus and low levels of properties on the market.
Mr Lawless also comments on the unique nature of the upswing that has seen property prices rise across all capital cities and regions.
“The last time we saw a sustained period where every capital city and rest of the state region was rising in value was mid-2009 through to early 2010, as post-GFC stimulus fueled buyer demand,” he said.
The mismatch between housing supply and demand continues to be the driving force behind higher property prices. The latest figures show that the number of properties advertised for sale nationally remains -26.2 per cent below 2020 levels.
Mr Lawless says that FOMO (fear of missing out) has returned to the property market as buyers compete for the limited properties for sale.
“Housing inventory is around record lows for this time of the year and buyer demand is well above average. These conditions favour sellers.
“Buyers are likely confronting a sense of FOMO which limits their ability to negotiate. Vendor discounting rates were estimated at a record low of 2.6 per cent in February, and auction clearance rates have consistently been in the high 70 per cent to low 80 per cent, which is well above average,” he said.
The latest ABS lending data supports this trend with figures showing new home loan commitments continuing on their record run, growing for the eighth consecutive month and reaching another record high.
Owner-occupier loans increased 10.9 per cent in January 2021 and a whopping 52.3 per cent over the year.
Investor activity is also ramping up, rising 9.4 per cent over January. ABS Head of Finance and Wealth, Katherine Keenan said that this is the largest rise since 2016.
“Investor lending has rebounded 62.4 per cent since reaching a 20 year low in activity in May 2020,” she said.
- OPEN AGENT