House to boom in May, with the latest data showing values increased by 2.2% and 10.6% annually. According to CoreLogic, Sydney continues to lead the nationwide price surge, rising by 3.0% in May. All the capital cities increased in value, with Brisbane up 2.0% and Melbourne by 1.8%.
While Hobart and Darwin continued their recent solid performances as well, Perth remains the weakest capital city market but still increased 1.1% last month. Over the past three months, national rose by 7%, with the median house price in Australia now sitting at $634,355.
After lagging , prices in the capital cities have now started to outpace the regional areas. We saw a significant shift from people looking to move away from capital cities last year; however, now many homebuyers are making it clear that the time is right to jump of regional areas.
three months and, in May, were 2.3% higher, compared to the 2.0% increase in regional areas. Over the quarter, regional areas have lagged with a 6.5% increase versus 7.1% in the capital cities.
The top End of the Market is Moving
While the boom in house prices is evident for all to see, CoreLogic’s Tim Lawless of the market, notably in Sydney and Melbourne, really driving the gains.“Despite the consistently strong headline results, the underlying trends have shifted over the past year,” Mr. Lawless said.
“The most expensive end of the market is now driving the highest appreciation across most of the capital cities, whereas early in the growth cycle, it was the most affordable end of the market that was the strongest.”“From a geographic perspective, the smaller capital cities led the housing market out of the COVID slump, but now Sydney has risen through the ranks to record the largest capital gain over the past three months with values up 9.3%.”
Stock Levels Remain Low
Low stock, high demand, and record-low interest rates continue to create a seller’s market in most areas. CoreLogic notes that while supply has increased, demand is still outpacing supply in most locations. The median time on the market remains around its record low of 25 days, while rates are also around record lows. The typical discount from the original asking price was recorded at -2.7% over the past three months.
“The sales to new “This rapid absorption rate is keeping advertised , despite the rise in new listings. Consequently, vendors remain in a strong selling position at the negotiation table.”around 1.1, meaning for every new listing, there is more than one sale occurring,” said Mr. Lawless.
Positive Cashflow Opportunities
With values rising, CoreLogic believes there are still several opportunities for mortgage rate now around 2.5%, many cities and regional areas show increasing rental yields, making them more cashflow positive than in previous years.. With the average
Notably, Perth and Darwin have seen 15-20% increases in rental yields over the past 12 months due to a highly tight supply for rentals. CoreLogic notes that the opportunity for positively geared rising and rental vacancies still high in many areas.
Housing Boom Rolls On
CoreLogic says that the housing boom is in full swing across the country, and it is not slowing down for now. They has had virtually no impact on housing markets, and the overall jobs market is improving. CoreLogic expects housing values to continue to rise throughout 2021 and into 2022, albeit at a gradually slower pace. For the complete CoreLogic Hedonic Home Value Index, please click here (PDF file)