CANBERRA, Australia — Australian residential property prices rose 13.5 percent over the 2020/21 financial year, the highest annual growth rate since 2004 and when the market was unwinding from the housing boom of the early 2000s.
The CoreLogic home value index rose 1.9 percent in June, with prices rising in all capital cities, led by a three percent gain in Hobart.
Over the year, house prices rose 15.6 percent, compared to units that increased by 6.8 percent.
Darwin posted the highest annual rate in dwelling values, increasing by 21 percent, followed by a 19.6 percent rise in Hobart.
CoreLogic head of research Eliza Owen said there were plenty of factors driving the housing market through the first six months of 2021 and before the recent uncertainty of growing Covid-19 cases emerged across the country.
Continued low mortgage rates, falling unemployment, elevated consumer confidence, the accumulation of savings through the Covid-19 restrictions last year, and relatively low advertised housing stock all fueled strong demand conditions.
“However, there are some markets where performance is starting to ease more notably,” Owen said.
Across the capital cities, there is a loss of momentum across Perth and Darwin, while softer growth rates are also emerging at the high end of the market.
“This easing in the pace of growth at the top end of the market is another clear sign of a shift in momentum,” Owen said.
“The rest of the market tends to follow movements at the high end, and this is the first time in nine months that the high-tier growth rate has not accelerated.”
CoreLogic, Inc. is an Irvine, CA–based corporation providing financial, property, and consumer information, analytics, and business intelligence. The company analyzes information assets and data to provide clients with analytics and customized data services.
Shane Oliver, chief economist, AMP Capital still expects further price gains of 20 percent over 2021, but this could be threatened by the coronavirus outbreak and snap lockdowns in various cities.
“But providing the lockdowns are relatively short, then the experience from the eight previous snap lockdowns around Australia since November, including that recently in Victoria, suggests that it won’t be enough to derail the housing market upswing,” Oliver said.
That said, he is still expecting financial regulators to step in with macro-prudential controls to slow home lending in the next few months.
AMP Capital is a large global investment manager headquartered in Sydney, Australia. They have a strategic alliance with Mitsubishi UFJ Trust and Banking Corporation.
(Edited by Vaibhav Pawar and Ritaban Misra)
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