Sydney house values surge 30 per cent in a year, Canberra next most expensive11/01/2021
Annual house value growth in Sydney has topped 30 per cent while Canberra has become the second most expensive capital in the country for a house as signs emerge the nation’s runaway property market may be starting to cool.
Data from CoreLogic on Monday showed dwelling values nationally lifted by another 1.5 per cent in October to be up by 4.6 per cent over the quarter and by 21.6 per cent over the past 12 months.
The median value of a Sydney house has climbed by more than 30 per cent over the past year, but there are signs the market may be about to cool.
In Sydney, house values increased by 1.6 per cent, with the median value now at a record $1.33 million. Over the past 12 months, Sydney’s median house value has climbed by 30.4 per cent.
Melbourne values lifted by 1 per cent with the median value at an all-time high of $972,659, a lift of 19.5 per cent over the past year.
But the median value of a house in Canberra climbed by 1.9 per cent last month to reach a record $985,000. Canberra’s median house value has now soared by 29 per cent since October 2020.
CoreLogic’s research director Tim Lawless said there had been a slight slowdown in overall dwelling value increases, as fundamentals such as income growth and supply started to catch up with the entire market.
“Housing prices continue to outpace wages by a ratio of about 12 to one. This is one of the reasons why first home buyers are becoming a progressively smaller component of housing demand,” he said.
“New listings have surged by 47 per cent since the recent low in September and housing focused stimulus such as HomeBuilder and stamp duty concessions have now expired.
“Combining these factors with the subtle tightening of credit assessments set for November 1, and
it’s highly likely the housing market will continue to gradually lose momentum.”
Around the rest of the country, the largest monthly increase was in Brisbane where the median house value lifted by 2.8 per cent to $731,392. In Adelaide, values were up by 2.2 per cent with the median at a record $591,558 while Hobart increased another 1.9 per cent to $727,000.
The overall increase came despite house values falling in two markets. The median value of a house in Perth edged down by 0.1 per cent to $550,000 while it fell by 0.2 per cent in Darwin to $567,000.
Regional markets, however, out-performed capitals.
In regional NSW, house values lifted by 2.2 per cent with a median value of $671,673 while in Victoria they increased by 1.9 per cent to a new median of $555,000.
Property listings tracked by CoreLogic are starting to lift, with more than 47,000 properties put on the market over the four weeks to October 24. They are now 22.7 per cent up on the same period last year and 5.2 per cent over the 5-year average.
“More listings mean more choice for buyers and less urgency in their purchasing decisions. FOMO is likely to remain a feature of the market while listings remain so far below average,” Mr Lawless said.
Mr Lawless said the downside risks for the housing sector were increasing.
The Reserve Bank board meets tomorrow and is expected to announce its abandonment of one of its three key quantitative easing policies. The yield on 3-year Australian bonds soared last week to 0.6 per cent, despite the RBA’s stated policy of trying to keep them at 0.1 per cent.
Financial markets are expecting the bank board to not only drop this policy, but sharply upgrade its economic forecasts. That would mean it abandoning its stated position that interest rates will stay at record levels until 2024.
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