CoreLogic’s national home value index recorded a 2.8% rise in March, the fastest rate of growth since October 1988 (3.2%). Sydney led the strong growth trends, with values surging 3.7% over the month and 6.7% higher over the first quarter of the year. According to Tim Lawless, CoreLogic’s research director, the last time we saw Sydney housing values record a quarterly trend of this strength was in June/July of 2015. Following this surge, the pace of growth was quick to slow as limits on investor lending came into play to slow the market.
March figures have pointed towards positive trends for the property market, including statistics that show Sydney and Melbourne have made a full recovery from the earlier downturns. Sydney dwelling values are now 2.6% higher than their July 2017 peak: a significant recovery considering the -14.9% drop in values through to May 2019 and the further -2.9% fall throughout the COVID downturn. Similarly, Melbourne housing values have recovered from the -11.1% fall between 2017 and 2019, and the -5.6% drop in values through the worst of the COVID related downturn to set a new record high in March. For the first time in a year as well, growth in capital city housing values outpaced the regional markets.
Low density housing continues to outpace high density housing, with new Domain data revealing the median auction price for Sydney for houses jumped 17% over the year to $1.755 million, while the median auction price for units rose 9% to $1.03 million. This means buyers are needing to save thousands of dollars extra to keep up with rising property prices. Potential purchasers who spent December of last year searching for a home without success would have needed to save an extra $53,000 since in order to maintain the same level of deposit, if they were aiming for 20%. New statistics suggest also that 1 in 4 first home buyers need between five and ten years to save a deposit so that they may break into the housing market. While low interest rates mean the cost of paying a mortgage each month has come down, rising property prices are lengthening the amount of time required to save for a deposit.
Demand continues to outweigh supply, with the number of property listings on the market dropping in the lead up to the Easter Long weekend last week. The volume for houses and units for sale in Sydney dropped last week by 12% when compared to the week before; in Brisbane by 8%, in Adelaide by 9.7% and Darwin by 11.4% Melbourne showed a small rise in listings by 1.5%, the other exceptions being Hobart which rose 18.7%, Canberra by 10.7% and Perth by 7.1%. Whilst many sales campaigns tend to avoid the Easter long weekend due to the potential disruption it can cause, this did not seem the case this year. The depletion of both new and old stock in the marketplace is likely to continue the trend of upward price growth, however with low listings over most state capitals, the danger is that the shortage of stock could have a negative effect, with a lack of supply deterring potential vendors from putting their homes on the market in case they cannot find anything to buy once sold.