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Australian property prices are now rising in every single capital city at an 'unsustainable' rate
The housing recovery appears to have swept up every one of Australia's capital cities, with prices rising in all eight in January according to research house CoreLogic.
Sydney and Melbourne continue to lead the charge, as prices grew 1.1% and 1.2% over the month, as each approaches their respective 2017 peaks.
However, CoreLogic head of research Tim Lawless notes the rate of growth appears "unsustainable" without the economic fundamentals to help support it.
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And away we go.
Australian property prices are locked in unusual agreement, uniformly rising in every single capital city across the country, according to the latest figures from property research house CoreLogic.
In the month of January, Melbourne and Sydney prices jumped 1.2% and 1.1% respectively, again leading the national market higher. Hobart put on 0.9%, Brisbane 0.5%, Adelaide 0.2% and the bush capital Canberra even managed 0.3% as some of those same properties faced destruction from encroaching bushfires.
"Australia’s housing value rebound continued into 2020 with the CoreLogic national home value index up by 0.9% over the first month of the year. This now takes the annual growth rate to 4.1%; the fastest pace of growth for a twelve-month period since December 2017," the CoreLogic January report, supplied to Business Insider Australia, said.
Meanwhile, even the nation's weakest performers Perth and Darwin scratched out the smallest of monthly gains, after five-year slumps.
According to CoreLogic head of research Tim Lawless, the data demonstrates "a broader recovery trend which originally began in Sydney and Melbourne midway through 2019, and gradually spread to other areas of the country."
Over the last 12 months, the Sydney and Melbourne markets have pushed around 8% higher, with Sydney putting on 5.6% last quarter. Melbourne values are just 1.2% off their 2017 peak, while Sydney's remain 5.4% from theirs. Some areas, in particular, are on track to break new ground sooner rather than later according to Lawless, like Melbourne's East, where “with such a rapid rate of growth, housing values in this area are likely to reach a new record high over the coming months.”
More broadly, however, soaring price growth appears to be mellowing somewhat as capital gains face "affordability constraints in the largest capital markets.
"There is evidence to suggest that housing value growth rates are tapering in Sydney and Melbourne, although with values rising at more than 1% month-on-month, this pace is still unsustainable considering household income growth is sluggish and housing affordability challenges are worsening," Lawless said.
In other words, without wage growth putting more money in people's pockets and as unemployment rises, Lawless fears there isn't enough economic support behind strong price growth.
As those prices reach closer to their 2017 peaks, a weak economic backdrop questions just how long prices can keep soaring.
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