CANBERRA, AAP – House prices are growing at their fastest monthly pace in 32 years with Sydney properties leading the pack with a 3.7 per cent increase in March.
The CoreLogic national home value index recorded a 2.8 per cent rise in March, with strong growth conditions across the country.
Sydney prices have now grown 6.7 per cent in the past three months.
“The last time Sydney housing values recorded a quarterly trend this strong was in June/July 2015,” CoreLogic research director Tim Lawless said.
“Following this brief surge, the pace of growth rapidly slowed as limits on investor lending kicked in to slow the market.”
Financial regulators are keeping a close watch on the latest housing market developments, but say they are not concerned at this stage.
The two biggest markets, Sydney and Melbourne, have made a “remarkable recovery”, Mr Lawless said.
Sydney dwelling values are now 2.6 per cent higher than their July 2017 peak having dropped 14.9 per cent to May 2019 and the further 2.8 per cent during the COVID-19 downturn.
Similarly, Melbourne housing values have recovered from the 11.1 per cent fall between 2017 and 2019, and the 5.6 per cent drop in values through the worst of the virus-related downturn, to set a new record high in March.
For the first time in a year, growth in capital city housing values outpaced the regional markets.
CoreLogic’s combined capital cities index recorded a 2.8 per cent lift in March compared with the 2.5 per cent gain seen across the combined regionals index.
However, this renewed strength in house prices, buoyed by record low interest rates, is raising concerns over housing affordability.
Everybody’s Home – a national campaign to end homelessness – warned spiralling prices would hit both aspiring buyers and renters and said an expansion of social and affordable housing was badly needed.
“More social housing would better balance the housing market, creating more options for those who can’t participate in the boom,” national spokesperson Kate Colvin said.
“Higher house prices fuelled by cheap money will lead to increased costs in the rental market, worsening affordability.”
CORELOGIC NATIONAL HOME VALUE INDEX FOR MARCH
National – up 2.8 per cent, up 6.2 per cent
Sydney – up 3.7 per cent, up 5.4 per cent
Melbourne – up 2.4 per cent, up 0.7 per cent
Brisbane – 2.4 per cent, up 6.8 per cent
Adelaide – up 1.5 per cent, up 8.6 per cent
Perth – up 1.8 per cent, up 6.0 per cent
Hobart – up 3.3 per cent, up 12.5 per cent
Darwin – up 2.3 per cent, up 14.2 per cent
Canberra – up 2.8 per cent, up 12.1 per cent
Combined capitals – up 2.8 per cent, up 4.8 per cent
Combined regional – up 2.5 per cent, 11.4 per cent