House prices surge at fastest rate since 2003
The nation’s property prices surged at their fastest rate since 2003 in February, led by the booming Sydney and Melbourne real estate markets where tens of thousands of dollars has been added to the median house value.
Every capital city and region recorded significant growth over the past 28 days, CoreLogic data released on Monday morning shows, with national dwelling prices rising 2.1 per cent in February. Sydney and Melbourne property prices increased 2.5 per cent and 2.1 per cent adding tens of thousands of dollars to the value of some homes.
House prices surged in February. Credit: Morgan Hancock
The Sydney Morning Herald/The Age Scope Survey on average predicted Sydney prices to grow 5.9 per cent in 2021 and 4.5 per cent in 2022, with Melbourne prices to rise 4.5 per cent in 2021 and 5 per cent in 2022. The new price data will continue to fuel speculation about a housing boom, with Westpac economists recently predicting values could grow as much as 20 per cent in major cities over the next two years.
Houses in Sydney recorded the strongest growth over the month on CoreLogic figures, with a 3 per cent increase in the median to $1,061,229. Melbourne house prices increased 2.4 per cent to $829,509.
Apartments increased in value modestly across all capital cities, with the exception of Darwin. Sydney and Melbourne unit prices were up 1.2 per cent each to $738,254 and $582,833 respectively.
Overall, rural areas are still outpacing their counterparts in the big smoke albeit by a small margin. Combined capital city prices were up 2 per cent over the month compared to 2.1 per cent in the regions. Sydney property growth is, however, outpacing regional NSW.
CoreLogic research director Tim Lawless said the monthly growth was the highest rate since 2003 and is the strongest sustained period of capital city and regional growth seen since the federal government increased housing grants after the global financial crisis.
“Whether this new-found growth in Sydney and Melbourne can be sustained is unclear. Both cities are still recording values below their earlier peaks, however at this current rate of appreciation it won’t be long before Australia’s two most expensive capital city markets are moving through new record highs,” Mr Lawless said.
CoreLogic is predicting a rise in homes for sale in March due to higher activity on its real estate agent portal.
“With household incomes expected to remain subdued and stimulus winding down, it is likely affordability will once again become a challenge in these cities.”
The most expensive homes are now outperforming, following a subdued period of growth. Mr Lawless said the top end of town typically falls faster in a downturn and rises more quickly in a rebound, matching the current market activity.
Sydney and Melbourne’s monthly growth has outstripped other cities but on a quarterly basis Darwin, Hobart and Perth are outperforming with home prices up 5.5 per cent, 4.8 per cent and 4.2 per cent respectively. Sydney dwelling values were up 3.6 per cent over the quarter, with Melbourne prices increasing 3.5 per cent.