Home prices rising at fastest rate in 17 years: CoreLogic

CoreLogic says the rises in Sydney and Melbourne will fuel new affordability fears | SEE HOW YOUR STATE FARED

An auction in Sydney at the weekend. Auctioneer Clarence White finds a buyer. Picture: Picture: Sam Ruttyn

Housing prices jumped at the fastest rate in 17 years in February, as a combination of recovery from the coronavirus crisisand low interest rates kicked buyers into gear, prompting fears of a new affordability crisis.

Home values surged 2.1 per cent higher in February in the largest monthly change since Aug­ust 2003 in the ­national homevalue index issued by research house CoreLogic.

Buyers were spurred by a mix of record low mortgage rates, improving economic conditions, government incentives and the lowamount of stock available for sale, driving the country’s housing market into a broadbased boom.

Housing values are rising in capital cities and regional areas, prompting comparisons to the housing boom in the wake of theglobal financial crisis and predictions that prices will run while rates remain low.

CoreLogic research director Tim Lawless said such synchronised growth had not been seen in Australia for more than a decade.

“The last time we saw a sustained period where every capital city and rest of state region was rising in value was mid-2009through to early 2010, as post-GFC stimulus fuelled buyer ­demand,” he said.

 

Tom and Kirsty Evans with son Henry and dog Freddy at their home in Orange NSW. Picture: Monique Lovick

Sydney and Melbourne were among the strongest performing markets, recording a 2.5 per cent and 2.1 per cent lift in home valuesover the month respectively, as they caught up from a weaker performance last year.

The quarterly trend is still favouring smaller cities. Darwin housing values jumped 5.5 per cent over the past three months,Hobart values leapt 4.8 per cent and Perth was up 4.2 per cent.

“Whether this new-found growth in Sydney and Melbourne can be sustained is unclear,” Mr Lawless said. “Both cities are recordingvalues below their earlier peaks, but at this rate of appreciation it won’t be long before Australia’s two most expensivecapital city markets are moving through record highs.”

He drew attention to the ­re-emerging affordability crisis that is hitting the two capitals.

Regional markets are also soaring, up 2.1 per cent over the month. Regional home prices surged 9.4 per cent in the year toFebruary, the strongest annual growth rate in 16½ years.

Tom and Kirsty Evans are about to list their house for sale in Orange, NSW, where the market is booming. “It’s a reallystrong property market in Orange,” Ms Evans said. “I’m biased but I think it’s a desirable place to live.”