Property researcher CoreLogic has found Australia’s residential home market has grown at the highest annual rate in 17 years, leaving dwelling values 13.5 percent higher than the end of the previous financial year.
“This is the highest annual rate of growth seen across the Australian residential property market since April 2004, when the early 2000’s housing boom was winding down after a period of exceptional growth,” CoreLogic Head of Research Eliza Owens said on July 1.
The growth was led by houses, which rose 15.6 percent over the year compared to a 6.8 percent growth in units.
In June, every capital city had an uplift in home values, with Hobart leading at 3 percent and Perth behind at 0.2 percent.
Over the past financial year, Darwin has had the highest annual growth rate of the capital cities, increasing by 21 percent. While, the regional markets, New South Wales homes had the highest growth at 21.1 percent.
Strong demand has continued to push the market, driven by strong consumer confidence and greater savings supported by low mortgage rates.
Supply also remains weak, with June listing numbers around 24 percent lower than the five-year average.
“This dynamic of strong consumer demand and low housing supply continues to create some urgency among buyers,” Owens said.
However, Owens noted that the growth rate was beginning to slow in some areas, which was seen in all capital cities, except Canberra, recording lower increases than May.
The high-end of the market was also cooling down.
Across the top 25 percent of home values, growth in the June quarter was down to 8 percent from 9.2 percent. While the high-end market still recorded the largest growth figures, it was the fastest month-on-month deacceleration.
“This easing in the pace of growth at the top end of the market is another clear sign of a shift in momentum,” Owens said. “The rest of the market tends to follow movements at the high end, and this is the first time in nine months that the high-tier growth rate has not accelerated.”
CoreLogic research director Tim Lawless said the market had likely already moved past the peak rate of growth in March, and the rest of the year would not be as strong.
Lawless also noted that the recent lockdowns were unlikely to impact values much, pointing to previous lockdowns where swift recoveries had followed small price falls.
“It all comes back to the duration of the lockdown, though,” he told Domain. “The wildcard this time around is the absence of any major fiscal support … I think that would be very important if we were to move through another period of extended disruption.”