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Property prices are at record highs and still climbing

A majority of Australia’s capital city property markets are at record highs as low rates and increased competition only push prices higher.

Capital city prices rose 5.6 per cent over the first quarter of the year, with six capital cities hitting records and showing no signs of slowing. Picture: Sam Ruttyn
Capital city prices rose 5.6 per cent over the first quarter of the year, with six capital cities hitting records and showing no signs of slowing. Picture: Sam Ruttyn
The Australian Business Network

Rapidly rising house prices have caused most of Australia’s capital cities to hit consecutive monthly highs, with the national median now 5.6 per cent above the previous market peak in 2017.

The springboard of low mortgage rates aided by greater economic certainty, consumer confidence and property scarcity caused prices to climb at the fastest rate in 32 years last month, up 2.8 per cent nationally.

Capital city prices rose 5.6 per cent over the first quarter of the year, with six capital cities — Sydney, Melbourne, Brisbane, Adelaide, Canberra and Hobart — hitting records and showing no signs of slowing as the market heads towards the traditional winter slowdown.

CoreLogic’s head of research Eliza Owen said the combined value of Australian dwellings hit $7.9 trillion over the month.

“Comparing current capital city values with previous peaks adds some perspective to the current upswing,” Ms Owen said.

“It also highlights the very different dynamics across capital ­cities.”

Sydney achieved record high prices at the top of the last boom cycle in 2017. Prices came off quickly in 2018 and 2019 as banking regulators forced a credit squeeze and consumer confidence fell away. But the median property in the city now costs $928,000, sitting 2.6 per cent above the previous high last month.

 
 

The last upswing lasted from mid-2019 to April 2020 and was only cut short by the pandemic. Described by CoreLogic as the fastest market recovery on record relative to the preceding downturn, it was during this time that most other cities were at their price pinnacle.

After hitting a high in March 2020, Melbourne bore the brunt of the property market’s COVID-19 impacts due to extended lockdown. It now sits 0.7 per cent above that at a median of $726,600.

Brisbane is currently 6.5 per cent above its peak set 12 months ago, Adelaide is 7.7 per cent higher than in May 2020, and Hobart has surpassed its February 2020 peak by 12.2 per cent.

Canberra has been hitting new highs each month since September 2019, up 16.9 per cent over the past year and a half.

The end of the mining boom in mid-2014 devastated the Darwin and Perth housing markets, with the latter considered the country’s most expensive city at that time. After 67 months of downward pressure, Perth has enjoyed eight consecutive months of rises, five of which have been more than 1 per cent. Darwin experienced peak-to-trough falls of 32.7 per cent but is now the fastest rising capital.

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Original URL: https://www.theaustralian.com.au/business/property/property-prices-are-at-record-highs-and-still-climbing/news-story/4a9c6219d18e74a1acec545c92510db5