Australian house values reached a record new high during the start of 2021 – even surpassing pre-COVID levels, according to latest data from CoreLogic.
During January, values climbed in every capital city, with Darwin topping growth at 2.3 per cent, followed by Perth and Hobart – both up by 1.6 per cent.
Sydney and Melbourne recorded the lowest change in dwelling values with a 0.4 per cent increase.
The Home Value Index is higher than before the pandemic, up by one per cent, and 0.7 per cent higher than at its previous peak in September 2017.
Demand for regional property showed no waning in the New Year with the combined regionals index up 1.6 per cent over the month – growing at more than twice the pace of capital city markets at 0.7 per cent.
Since the onset of the pandemic in March last year, regional housing values have surged 6.5 per cent.
Tim Lawless, CoreLogic’s research director said the divergence between metro and regional housing demand is more prevalent in NSW and Victoria than in other States.
Better housing affordability, opportunity for a lifestyle upgrade and low density housing are believed to be behind the trend, along with the popularity of remote working arrangements.
“Internal migration data shows more people are leaving Sydney and Melbourne for regional areas, resulting in a transition of activity from the metro regions to the outer fringe and regional markets,” Mr Lawless said.
“As Melbourne and Sydney historically receive the vast majority of overseas migrants, these metro areas have been the hardest hit by this demand shock.”
Houses have outperformed apartments over the past six months with values increasing by 3.5 per cent, while unit values have been unchanged.
It is not just Melbourne and Sydney impacted, with data showing every capital city has recorded a stronger result for houses in the past three months.
“Demand for units has diminished through COVID-19 amidst record low levels of investor participation and changing living preferences,” Mr Lawless said.
“At the same time, supply levels are heightened in some precincts. While demand and supply remain imbalanced we are likely to see units continue to underperform relative to detached housing market.”
A shortage of listings is anticipated to put upward pressure on house prices but could change in coming months.
CoreLogic estimates that the number of national home sales over the past three months was 23.9 per cent higher than the equivalent three-month period from a year ago.
The volume of regional homes sales is estimated to be 26.8 per cent higher than a year ago, while capital city sales were up 22.1 per cent.
“Advertised supply levels are low while demand is strong,” Mr Lawless said.
“This is a seller’s market, but for some reason we are still seeing below normal vendor numbers across most markets. With sentiment rising and selling conditions favouring the vendor, it is reasonable to expect new listing numbers will rise as the year progresses which may help to temper housing market conditions.”
Change in dwelling values – January 2021
- Sydney 0.4 per cent
- Melbourne 0.4 per cent
- Brisbane 0.9 per cent
- Adelaide 0.9 per cent
- Hobart 1.6 per cent
- Perth 1.6 per cent
- Darwin 2.3 per cent
- Canberra 1.2 per cent