House prices have hit a new record high across all Australian capitals with the exceptions of Darwin and Perth.
The Domain House Price Report for the December 2020 quarter released this morning also shows that outer city regions across the country saw record price growth as demand rose throughout COVID.
Also recording strong house price growth between December 2019 and December 2020 were the Blue Mountains and the Central Coast in NSW, the Mornington Penninsula in Victoria as well as the Gold Coast and the Sunshine Coast in Queensland.
“National house prices reached a record high at the end of 2020,” said Domain Senior Research Analyst, Dr Nicola Powell.
“The 4.1 per cent gain over the December quarter to $852,940 marks the steepest quarterly jump in four years.
House prices across all capital cities are now at new peaks, apart from Darwin and Perth.
National unit prices increased a more modest 1.3 per cent over the December quarter to $574,245 and now are only 1.4 per cent below the mid-2017 peak and could surpass this high over the next quarter.
The December quarter figures also show Hobart has been pushed off the top as one of the most affordable capital cities to purchase a house; it is now more expensive than Darwin and Perth.
Dr Powell says it was only a year ago Hobart was the most affordable capital city to purchase a house – but it is now more expensive than Darwin and Perth.
“If the pace of house price growth continues it is set to overtake Adelaide,” said Dr Powell.
“Post-pandemic, Tasmania will be an attractive destination for residents seeking liveability, lower-density living and affordability.
“This could put further pressure on prices.”
Unit prices also performed well, albeit increasing at a more modest 1.3 per cent over the December quarter to $574,245.
Overall, they are now only 1.4 per cent below the mid-2017 peak and Dr Powell says they could surpass this high over the next quarter.
But in places like Sydney, Dr Powell notes the gap between houses and units continues to widen.
“Over the past three decades it is rare that house and unit prices move in opposite directions annually,” said Dr Powell.
“Weaker investor activity has disproportionately impacted unit prices because they tend to be the preferred property type.
“There are also particular locations with increased supply as a result of heightened development in recent years. “
Changed lifestyle preferences post-lockdown and the option of remote working has driven demand to outer suburban and regional locations as buyers seek affordability, liveability, space and greater value for money.”
Defying the odds of an extended lockdown, Melbourne house and unit prices also rebounded over the final quarter of 2020, pushing both house and unit prices to record highs.
Brisbane’s market remains two-speed – unit prices remain at 2014 levels, having fallen 1.1 per cent, whereas house prices have risen a further 0.8 per cent over the quarter.
To the north and south, the Gold Coast and Sunshine Coast house and unit prices continue to outpace Brisbane.
“Gold Coast house prices increased 7.6 per cent annually to $705,000 and units are 7.1 per cent higher than last year at $450,000,” said Dr Powell.
“This is the strongest rate of annual growth recorded on the Gold Coast since 2017.”
While Perth remains the second-most affordable city to purchase a house or a unit, the market recovery is well underway.
“Despite the economic turmoil of 2020, it has been the year to mark a turnaround for homeowners,” says Dr Powell, with house prices finishing the year 6.6 per cent higher, and units finishing the year 4.4 per cent higher.
Darwin too has ended the year in a higher position than other years.
“House prices continued to grow over the December quarter, up 2.3 per cent and 0.6 per cent respectively, said Dr Powell.
The unsung hero of 2020 however goes to the nation’s capital.
“Canberra house prices set a new record high at the end of 2020 and unit prices are also edging closer to a new price peak,” said Dr Powell.
“House prices surged 6.4 per cent over the December quarter to $855,530. This has produced the steepest annual gain since early 2017 at 9.1 per cent.
“Unit prices are only 1.3 per cent below the record high achieved at the end of 2019.
“Over the past five years house prices have risen almost 32 per cent while growth in unit prices has been less than half this. Some areas have increased new development supply, which will weigh on capital growth.”