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House Prices Surge Towards Pre-Covid Highs

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National house prices could surpass pre-Covid levels in early 2021 as dwelling values hit record highs across 32 regions.

The Corelogic report for November shows the value of homes rose across every city and state pushing the market further along its road to recovery.

Top performers are Brisbane, Adelaide, Hobart and Canberra where prices moved to record highs in November.

However the rate of improvement is better in some places than others, as Sydney and Melbourne sit at 2017 prices, Darwin at 2006 and Perth at 2007 prices according to the Corelogic report.

Corelogic house price index: November

LocationMedian ValueMonthQuarterAnnualTotal Return
Sydney$860,9670.4%0.3%3.7%6.3%
Melbourne$672,1720.7%-0.4%-0.9%2.5%
Brisbane$515,2670.6%1.5%3.2%7.2%
Adelaide$459,8961.3%3.4%5.3%9.4%
Perth$463,8461.1%1.9%0.8%5.2%
Hobart$505,6831.4%2.9%5.6%10.9%
Darwin$405,8571.9%4.7%5.9%11.7%
Canberra$672,8661.9%3.3%7.0%12.1%
Combined capitals$642,8630.7%0.7%2.4%5.7%
Combined regional$411,1291.4%2.8%5.7%10.6%
National$565,4740.8%1.1%3.1%6.6%

^Source: Corelogic November Home Value Index

Corelogic head of research Tim Lawless said in November there was more divergence between house and unit prices.

Across combined capitals houses are up 1.1 per cent and down -0.6 per cent for units .

“This trend towards stronger conditions in detached housing markets is evident across most of the capital cities,” Lawless said.

“Relative weakness in the unit market can be attributed to factors including low investment activity, higher supply levels in some regions, and weaker rental market conditions across key inner city unit precincts.”

Regional areas continued to perform well, doubling the rate of capital cities at 1.4 per cent compared to 0.7 per cent in the metropolitan areas.

Queensland led the charge with a 3.2 per cent lift over three months, closely followed by NSW at 3.1 per cent.

Commsec senior economist Ryan Felsman said this is the biggest lift in regional home prices in 16.5 years.

“The recovery in Australia’s residential property market continues, supported by record-low mortgage rates with increased competition among home lenders fanning home price growth,” Felsman said.

“According to the Bureau of Statistics, the value of new home lending commitments surged almost 34 per cent in the four months to September with another gain of around 2.5 per cent expected by economists in October.”

While home prices are on the up, rental affordability is actually improving in Sydney, Melbourne, Brisbane, Adelaide, Hobart and Perth through the pandemic.

The Homebuilder extension is also expected to have an impact on house prices and approvals which hit a 20 year high according to the ABS.

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Article originally posted at: https://www.theurbandeveloper.com/articles/house-prices-surge-towards-pre-covid-highs