The robustshows no sign of slowing down, with the latest data from CoreLogic showing dwelling values are rising at the fastest rate in 32 years. According to CoreLogic, rose by 2.8% in March, the most significant increase we’ve seen since October 1988.
In March, all capital cities saw strong growth, led by Sydney, with a solid 3.7% increase in dwelling values. While the weakest capital city was Adelaide, which still saw 1.5% growth. Regional to perform strongly, increasing value by 2.5%. The last house prices rose this quickly in Sydney was in the previous boom in 2015, before the credit tightening policies introduced by APRA.
The strong result in March means that Sydney and Melbourne have fully recovered from the small COVID-induced downturn in mid-2020. Sydney prices are back above their 2017 highs by 2.6% and have fully recovered from the -14.9%boom. Similarly, Melbourne house prices are fully recovered and are back at .
We are also starting to see the larger capital cities overtake the smaller capitals that had previously seen robust growth. The firstgains, with dwelling values up by 5.8% nationally. In terms of the units vs. houses, there is still clearly stronger demand for lower-density property as homes increased by twice as much as units over the first quarter.
At the same time, the upper end of the homes increased in value by 3.7%, outpacing the lower quartile, which showed a 1.6% increase.. In March, the upper quartile of
Tight Listings Continue for Now
The strong gains continue tofrom low-interest record rates and tight supply. The RBA has made it clear interest rates are likely to remain low for the while listings are also at historically low levels.
Graph of the Cash Rate Target
Total listings nationwide are still 25% below the five-year average. However, that could be slowly starting to change as new listings are on theconfidence and look to capitalize on the state of the market. New listings are currently 3% above the five-year average and appear to be trending higher.
For the time being, markets across the country are favoring sellers. However, CoreLogic notes that things will likely slow down from the current record-setting pace. So far, the strong demand from buyers has not been met by increases in inventory levels. However, the sellers will return to the market at some point, as we’ve already started to see new listings on the rise.
Similarly, there has been a large influx of first home buyers, whose decision to purchase a property has likely been brought forward by the range of Government incentives on offer. If they haven’t already, many of these incentives are set to end this .
While it has been stated that interest rates are likely to remain low for some time if the housing market continues to overheat, there is also some possibility that we could also see tighter credit policies, which, as we know, can have an immediate impact on demand. For the time being, to rise, according to CoreLogic. However, we should expect the pace of down.