Yahoo Finance Aussie city where house prices grew $1,100 a DAY
If you want to buy a house in Australia you’re going to need more than $1 million, on average, no matter which city you’re looking to buy in.
Australian median combined capital house prices hit a record-breaking high, surpassing $1 million in 2021, according to a new report from Domain.
The report revealed that house prices also grew at a rate three times faster than units over the past 12 months.
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All Aussie capitals except Perth and Darwin hit new record highs for house prices but one capital in particular made insane gains.
Sydney house prices rose a massive 33.1 per cent over the year, with the median house price in the city increasing to $1.6 million.
Domain chief of research and economics Nicola Powell said house and unit prices had actually been boosted by lockdowns as household savings rose.
“Demand continues to outstrip supply across a majority of the cities, however, rapid price growth and affordability issues are likely to shift demand in 2022,” she said.
“Price growth has slowed from earlier in 2021 but it is higher than last quarter.”
Here is a breakdown of how each capital performed.
Sydney
Domain’s House Price Report revealed Sydney house prices rose by roughly $1,100 per day over 2021.
That is a total rise of around $400,000 for the year to a new record high of $1.6 million. At 33.1 per cent, this is Sydney’s steepest annual rate of growth on record.
Unit price growth increased by 8.3 per cent annually, hitting a new record high of $802,255.
“House prices have grown four times faster than units over the past year, a divergence that has created a record price gap with houses now double the price of a unit,” Powell said.
“The rapid escalation in price is proving to be a significant financial barrier to entry for buyers and upgraders against a backdrop of low wage growth.”
Melbourne
House and unit price growth gained momentum over the last quarter as buyer and seller activity rebounded post lockdown.
House prices reached a new record in Melbourne with the median price growing 5.8 per cent to reach $1.1 million.
Unit prices also reached a new high of $593,387 - marking the strongest quarterly growth in two years of 3.9 per cent.
Since late 2020, annual house price growth has significantly outperformed units. House prices rose $660 a day over the quarter, the steepest dollar increase on record for a single quarter.
This is the largest divergence in growth on record, pushing the price gap between property types to an all-time high.
“Although Melbourne’s severe and extended lockdowns came to an end, we have seen many businesses close and residents move away from the city,” Powell said.
“This means that the availability of homes for sale is building, with total supply now sitting at 10 per cent above the five-year average, and the value of new home loans has eased from its peak.”
Powell said that sellers should move into 2022 with some confidence that the pace of price growth will ease.
“[Sellers] will need to have a more realistic view of pricing because buyers now have more choices,” she said.
Brisbane
Buyers can expect to pay a record high of $792,065 on average as Greater Brisbane house prices grew by 10.7 per cent over the quarter and 25.7 per cent annually.
This is the steepest increase in almost 18 years.
Unit prices grew by 2 per cent over the quarter and 3.5 per cent annually, for the first time since mid-2016, hitting a new record high of $416,033.
In fact, the report found house prices rose seven times faster than units over the past year, the largest divergence on record, pushing the price gap between property types to an all-time high.
“The rapid price escalation will prove to be a financial hurdle for entry buyers,” Powell said.
“It will also be challenging to upgrade from a unit to a house, particularly against a backdrop of low wages growth.
“While housing affordability remains less challenging in Greater Brisbane compared to other cities, the volume of choice is problematic, making it highly competitive for buyers.”
Adelaide
Buyers can expect to pay more than $700,000 for a house in Adelaide for the first time on record.
House prices recorded the steepest gains ever with an increase of 8.6 per cent quarterly and 27.5 per cent annually, setting a new record high of $731,547.
Unit prices also reached a new record high of $380,349, a result of a quarterly increase of 4.5 per cent and annual increase of 11.5 per cent, the strongest annual gain since 2008.
Demand in Adelaide is also strong, with the number of homes sold reaching its highest point on record.
House prices have risen more than twice the rate of units over the past year, creating another record price gap.
“Demand continues to outstrip supply, with the overall supply of homes for sale dropping to a multi-year low and forcing house price growth,” Powell said.
“South Australia has been one of the states to benefit from the flow of Australians that have sought to either escape lockdown, embrace remote work culture, or return to their home state.”
Perth
House prices increased by 1.8 per cent quarterly, reaching $612,348 and unit prices by 2 per cent reaching $380,353.
Despite the increase in house and unit prices, the pace of growth has slowed compared to that seen in late 2020 and early 2021, the report found.
Perth continues to hold the title of the most affordable city to buy a house as prices swiftly rose across the other cities.
“Extended state border closures continue to hamper housing demand, as new residents are disrupted from moving into the state,” Powell said.
“Once borders reopen, this could provide another wave of new demand, freely allowing an easier relocation from overseas and interstate.”
Powell said Perth has benefitted from a positive flow of residents into the city, although it has eased slightly.
“This has been a huge change for the city that had seen a drain of residents away. That being said, sale volumes are sitting close to record numbers and demand remains strong but looks to be easing,” she said.
“Buyers are being supported by low interest rates, coupled with a decline in spending as border closures stall travel plans and have boosted savings.”
Hobart
Buyers can expect to pay more than $700,000 on average for a house in Hobart for the first time on record.
House prices have increased by 8.7 per cent over the quarter hitting a new record high of $752,110.
Surging by 44.9 per cent since the pandemic began, Hobart house prices boast the second-highest growth rate of all Australian cities.
“Hobart’s streak of record-breaking house prices hit a milestone over the last quarter by surpassing $700,000 for the first time,” Powell said.
“With the lowest average wages of all the states we can expect that entry-level buyers who are on a local average wage will find it increasingly difficult to enter the housing market.”
Canberra
Canberra is now the second-most expensive city to purchase a house, with median house prices hitting a new record high of $1.178 million.
This is the steepest quarterly growth on record and makes the past year the strongest upswing in Canberra’s house price history, up 36.6 per cent.
However, unit prices declined by 1.6 per cent to $555,644, although prices are up by 9.7 per cent annually.
“Since the pandemic began, house prices have risen 52 per cent, the highest rate of growth recorded across the capital cities,” Powell said.
“The rapid escalation in house prices will be a financial barrier for entry buyers and upgraders against a backdrop of low wages growth.”
Darwin
House prices were at $645,487, the highest point in six years, after rising 30.1 per cent last year and unit prices at $326,159, increased marginally by 1.8 per cent over the quarter and by 11.1 per cent annually.
"Darwin house prices have seen a sharp upswing since the pandemic began, producing the strongest rate of annual growth in roughly 17 years and the highest median price in six years,” Powell said.
“Demand for Darwin property still remains strong as the number of homes sold reached a 13-year high over the December quarter. However, it appears the pace of price growth has peaked."
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