House Prices Hit New Highs In Six Capitals
- Posted By Pasang Sherpa
House prices have soared to dizzying new heights in six capital cities, with two breaking big barriers and another set to do so over the next three months.
The most recent price data would certainly surprise potential buyers, but it should inspire sellers and others looking to capitalize on the hot market. And, unlike previous hot markets, this pattern is consistent across the nation.
Of the latest highs, Sydney's median house price has surpassed $1.3 million, while Hobart's is just over $600,000. According to the new quarterly Domain House Price Report published on Thursday, the Apple Isle capital is currently more expensive than Perth, Darwin, and Adelaide.
Melbourne's median house price is on track to reach $1 million in the June quarter, and it's now at a new peak of almost $975,000, up 4.8 percent in just three months.
Prices in Canberra have risen nearly 10% in three months and nearly 20% in a year, reaching a new high of nearly $930,000.
Brisbane, at just under $632,000, and Adelaide, at almost $600,000, are also at all-time highs. Prices are at their peak since December 2015 in Perth, where the economy is rebounding after years of recession after the mining boom, with the median currently nearly $580,000. Darwin is now recovering, with a current median price of just over $550,000, the best since December 2017.
“It’s the first time we’ve got two consecutive quarters of price growth for all capitals since 2009,” Dr Powell said. “It is reminiscent of that period post-GFC when all capitals went into an upswing. Even though we didn’t see a decline due to COVID, we’ve seen an acceleration of homebuyers in the market that perhaps prior to COVID wouldn’t have been in the market.”
Across the country, low numbers of property for sale has contributed to such strong results because fewer properties for sale generally leads to more competition to what is available. But it’s not the only reason: low-interest rates have also played a part, as have government incentives. Some commentators are now suggesting assistance such as first-home buyer stamp duty concessions and the federal government’s HomeBuilder scheme need to be wound back.
“The rate of growth is rare, particularly when some have posted strongest growth on record. It’s not sustainable, that kind of increase and there are various things that will affect that level of growth. One is affordability. It will slow down the number of people looking to purchase.
“[The second is] sellers will be brought to market by strong conditions. One of the biggest factors driving up factors is the lack of supply combined with the record levels of housing finance. It just hasn’t been able to keep pace with the number of buyers.”
Dr. Powell predicted that the Australian Prudential Regulation Authority (APRA) will be unable to intervene in the industry because the market would inevitably slow to more competitive levels before the start of next year.
“Sydney was already unaffordable before this. What [intervention] we saw last time was targeted to investors. They haven’t been a driving force behind this market. Any intervention is going to have be carefully planned policy so it doesn’t impact first-home buyers.”
The eastern suburbs, northern beaches, and Hawkesbury regions led the charge, with rates rising at their highest quarterly rate since Domain records started in 1993. House prices in Sydney have reached new highs in every area, according to Dr Powell.
SOURCE:
Lowe, A., 2021. Domain.com.au. [Online]
Available at: https://www.domain.com.au/news/sydney-melbourne-brisbane-adelaide-canberra-hobart-house-prices-at-record-high-1047969/?fbclid=IwAR2KnlM0wGOcIPHmW1mehzK5FNmmRnJ-evMZO9gQdkG1EPYEfUyzCPM-r_s