House prices across the country have increased by 32.5 percent since the outbreak of COVID-19, a report by CoreLogic has found.
This is despite multiple interest rate rises and high inflation, meaning the median value of an Australian house has risen by $188,000 in the last four years.
The loosening of restrictions following the outbreak of COVID saw overseas migration reach record highs, which has put pressure on housing supply and thus prices.
Rents also increased in the same period, rising by 32.4 percent since March 2020, or an extra $150 per week for a median property.
Cyclical changes
“Despite the strength in the headline figure, the housing market has moved through distinct cycles punctuated by changes in policy, interest rates, and demographic shifts,” Mr. Lawless said.“The market slumped 7.5 percent as interest rates rose from their emergency lows, but as inventory dried up and migration boomed, housing values commenced a new growth cycle in February.”
Last year CoreLogic’s national Home Value Index (HVI) rose 8.1 percent. However, there was considerable diversity across different parts of the country, with the annual change ranging from a 15.2 percent growth in Perth, to a 1.6 percent fall across regional Victoria.
Dwelling values have been rising at more than 1 percent every month on average across Perth, Adelaide, and Brisbane since May, while in Melbourne and Sydney, growth has slowed sharply since the June rate hike.
Melbourne values declined through November and December, while Sydney home values stabilised with a monthly growth rate of just 0.2 percent in the final two months of the year.
The smaller capital cities have been soft through most of the year, with Hobart (-0.8 percent) and Darwin (-0.1 percent) recording an annual decline in value, while the Australian Capital Territory recorded a rise of just 0.5 percent.
“[This] diversity across the capital cities can be broadly attributed to factors relating to demand and supply,” Mr. Lawless explained. “In Perth, Adelaide and Brisbane, housing affordability challenges haven’t been as pressing relative to the larger cities, and advertised supply levels have remained persistently and substantially below average.”
“The cities where home value growth has been lower, or negative, through the year are showing higher-than-average levels of advertised supply alongside annual home sales which ended the year below the five-year average.”
