New year delivers record high in housing prices

Australian housing prices have hit a record high after a strong start to 2021, as buyers compete for the limited properties available.

Kate and Stuart Stevens with daughters Indiana and Tahlia. Picture: Jane Dempster

Australian housing prices have hit a record high after a strong start to 2021, as buyers compete for the limited properties available.

Prices pushed one per cent higher than pre-COVID levels through January with a 0.9 per cent rise nationally, according to property researcher CoreLogic.

The increase came off the back of strong lending figures spurred by record low rates and the number of available properties being unable to meet the high levels of buyer demand.

CoreLogic’s research director Tim Lawless said the high was unsurprising. Prior to the pandemic and the related downturn, the market was approaching a record high and only placed back on that trajectory in September 2020.

 

“The national housing market nearly hit a new record high just before COVID hit. So in many ways, this just closed the gap of that near recovery we saw pre-COVID,” he said.

“When you consider how low mortgage rates are and the fact that listing numbers are still so extremely low at a time when buyer demand has risen so quickly, it’s not surprising to see such rapid appreciation in housing values.”

Sydney and Melbourne each rose 0.4 per cent, Brisbane and Adelaide were up 0.9 per cent and Perth and Hobart prices pushed 1.6 per cent higher. Darwin was the strongest performer (up 2.3 per cent) of the month, while Canberra rose 1.2 per cent. Kate and Stuart Stevens, aged 42 and 44, decided the new year was the time to sell their investment property. In September, they began a large-scale 12-week renovation of the house at Normanhurst, northwest of Sydney.

“We were watching the market quite closely,” Ms Stevens said. “I didn’t expect prices to be this crazy. You could see prices were increasing so we decided to go now.”

The couple are selling through Anna Cavill of Ray White Upper North Shore.

Australian regions reported the highest rate of quarterly growth since 2003, with a 4.7 per cent rise.

AMP chief economist Shane Oliver said the current pace of lending and price growth was likely to cause concern for the Reserve Bank, who might bring in measures to curb the market.

“At the very least it would make sense for home borrower incentives to be wound back … and if housing credit growth accelerates significantly, we are likely to see a renewed tightening in lending,” he said.