House prices rose across the nation for a second month in a row in November and could surpass their pre-COVID levels in early 2021 if the pace of the current trend persists.
Backing this positive outlook, one of Australia’s biggest retail banks said demand for its home loans was the strongest seen for more than two years.
At the same time, the Australian Bureau of Statistics said approvals for private sector houses rose for the fourth consecutive month in October to the highest level since February 2000.
The CoreLogic home value index for November rose 0.8 per cent to be 3.1 per cent higher over the year.
“If housing values continue to rise at the current pace we could see a recovery from the COVID downturn as early as January or February next year,” CoreLogic’s head of research Tim Lawless said.
“The recovery in Melbourne, where home values remain five per cent below their recent peak, will take longer.”
Housing values moved to record highs in Brisbane, Adelaide, Hobart and Canberra through November.
In Sydney and Melbourne, home values remain at levels similar to those seen in early 2017.
“While rising, Perth values are similar to mid-2006 levels, whilst Darwin values are in line with 2007 levels,” Mr Lawless noted.
The ABS said building approvals rose 3.8 per cent in October to be 14.3 per cent higher than a year earlier.
However, private sector house approvals rose by a further 3.1 per cent to be a massive 31.7 per cent higher on the year.
National Australia Bank executive for home ownership Andy Kerr said home loan demand was the strongest in two years, with a 25 per cent jump in NAB applications over the past six weeks compared to the previous six.
“Demand has been supported by record low rates, growing confidence in the economic recovery and strong government support measures,” Mr Kerr told AAP.
“We expect strong interest to continue given the likelihood of low rates for several years and as more stimulus measures come into effect from state governments.”
NAB is forecasting property price growth of upwards of five per cent in each of the next two years, with apartment prices likely to lag house price growth.
CORELOGIC HOME VALUE INDEX FOR NOVEMBER:
* National – up 0.8 per cent
* Sydney – up 0.4 per cent
* Melbourne – up 0.7 per cent
* Brisbane – up 0.6 per cent
* Adelaide – up 1.3 per cent
* Perth – up 1.1 per cent
* Hobart – up 1.4 per cent
* Darwin – up 1.9 per cent
* Canberra – up 1.9 per cent
* Combined capitals – up 0.7 per cent
* Combined regional – up 1.4 per cent