Houseby 16.1% over the past 12 months, making it the most robust property market ever since 2004. While the latest data from CoreLogic paints a positive picture of the current state of the market, it’s also clear that momentum is slowing down. Over July, increased in all shapes and territories, and once again, the same capital cities performed strongly.
Canberra was the best-performing property market last month, increasing in value by 2.6% and adding to a 20.5% increase in the past 12 months. Hobart and Darwin increased in value by 1.7% in July and grew in importance by 21.9% and 23.4%, respectively, over the past year, making them the two most robust markets in the country. Sydney jumped by 2.0% and has seen 18.2% annual growth. However, CoreLogic has noted that the market here is finally cooling down. After witnessing a peak monthly growth of 3.7%, Sydney has had the most significant relative fall in growth rates.
Meanwhile, Brisbane continues to perform well, growing at 2.0% in July and 15.9% over the last 12 months. Once again, Perth is underperforming all other property markets, having seen only 10.8%. Head of Research at CoreLogic, Tim Lawless, notes that in many areas and negative sentiment thanks to ongoing lockdowns. “On the flip side, demand is being stocked by record-low mortgage for an extended period. Dwelling sales are tracking approximately 40% above the five-year average, while active about -26% below the five-year average. The mismatch between demand and advertised supply remains a placing pressure upwards on housing prices,” Mr. Lawless said.
After performing well above expectations in 2020, regionallevels similar to the metro areas. In the first seven months of 2021, CoreLogic data shows an almost equal growth rate markets, with deals up 14.5% and 14.0%, respectively. In terms of types of properties performing well, it continues to be detached and apartments. Houses increased in value by two to three times units in most cities with the expectation of Hobart over the as buyers continue to have more space and lower-density living. The other factor that markets around the country is still the low stock levels.
Advertised listing numbers remain well belowmost parts of the country. Recently, the number of newly advertised properties has fallen sharply across , with many vendors waiting until conditions ease. Mr. Lawless believes that while listings are low, demand could also potentially change going forward. “With buyer demand so strong and active listings well below average, prospective buyers are likely to feel a sense of urgency due to the level of competition in the market.” “However, with affordability constraints starting to impact purchasing capacity, it’s possible that market activity could reduce through the second half of the year, helping to rebalance the market and take some heat out of the growth,” Mr. Lawless said.
Looking forward, Australia’sremains in a strong position. However, signs of a slowing appreciation rate have become more evident. According to CoreLogic, the growth rate to taper through the second half of 2021 as affordability constraints become more pressing and the housing supply gradually increases. Other potential headwinds are apparent, including the possibility of tighter credit policies and an earlier-than-expected interest rate lift, which could also dent sentiment and translate into lower growth. For now, lockdowns will of momentum, particularly from a transactional perspective in Sydney, which is enduring an extended period of restrictions.