Property prices are rising in every major Australian market, growing by 0.8% nationally.
If they maintain the current pace, CoreLogic head of research Tim Lawless said new records will be set by early next year.
“Buyer demand is mostly being fuelled by a surge in owner occupiers rather than investors looking to take advantage of historically low interest rates, generous government incentives and an increased state of normality,” he said.
As the year nears its finale, increasingly confident Australian homebuyers could push property prices to new highs.
With home values pushing 0.8% higher in November, according to the CoreLogic national index, the new year could see them more than regain what ground was lost in 2020.
“The national home value index is still seven tenths of a percent below the level recorded in March, but if housing values continue to rise at the current pace we could see a recovery from the COVID downturn as early as January or February next year,” head of research Tim Lawless said.
“Low advertised stock levels, together with a rising number of active buyers, is creating a renewed sense of urgency in the market. Buyer demand is mostly being fueled by a surge in owner occupiers rather than investors, looking to take advantage of historically low interest rates, generous government incentives and an increased state of normality.”
Unsurprisingly, it’s been the most affordable segment of the market that is seeing prices soar, rising 1% in November. All big four banks have now reversed their predictions of further falls.
With clearance rates elevated at around 70%, some cities are already setting new records, with Brisbane, Adelaide, Hobart and Canberra all breaking new highs in November. Sydney, meanwhile, is at early 2017 levels and still rising towards its former peak.
Melbourne marks the one exception to the rule. Home values there remains 5% below their most recent peak, and will require more time to recover. Meanwhile, its inner city apartments have managed to buck another trend prevailing in other cities.
“This trend towards stronger conditions in detached housing markets is evident across most of the capital cities. Relative weakness in the unit market can be attributed to factors including low investment activity, higher supply levels in some regions, and weaker rental market conditions across key inner city unit precincts,” Lawless said.
Not so in Melbourne, where apartments have shown “surprising” resilience, so far, according to Lawless.
“We suspect the stronger trend in Melbourne unit values relative to houses could be short-lived unless overseas migration turns around sooner than expected which would help to shore up rental tenancy demand,” he said.
Elsewhere, regional Australia prices rose 1.4% during November, twice that of the combined capital cities.
Written by Jack Derwin
Source: Business Insider Australia