Australian property prices rose 2.1 per cent in the month of February, recording the fastest month-on-month rise in nearly two decades, new data reveals.
Fresh figures from CoreLogic released today showed that dwelling values across Australia rose in every capital city and regional area, showing a big upswing across the nation.
Sydney and Hobart led the uptick, with both cities recording 2.5 per cent house price growth in the month of February.
This was followed by Melbourne at 2.1 per cent, with the southern city’s property market rebounding strongly following the COVID-19 lockdowns.
On the other side of the spectrum, Darwin saw the lowest growth of all the capital cities, recording a house price rise of 0.7 per cent.
Adelaide house prices rose 0.8 per cent over February.
But smaller cities haven’t missed out on house price growth; over the last three months, Darwin and Adelaide have seen home values rise 5.5 per cent and 2.7 per cent respectively, with Adelaide dubbed one of Australia's most "consistent" and "underrated" property markets.
“Spurred on by a combination of record low mortgage rates, improving economic conditions, government incentives and low advertised supply levels, Australia’s housing market is in the midst of a broad-based boom,” CoreLogic’s report stated.
This kind of synchronised growth hasn’t been seen in over a decade, said CoreLogic research director Tim Lawless.
“The last time we saw a sustained period where every capital city and rest of state region was rising in value was mid-2009 through to early 2010, as post-GFC stimulus fueled buyer demand.”
While Sydney and Melbourne were the strongest-performing markets over the month of February, Lawless noted that the sustainability of this growth was “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,” he said.
“With household incomes expected to remain subdued and stimulus winding down, it is likely affordability will once again become a challenge in these cities.”
Regional areas still leading the upswing
House prices are continuing to rise faster in regional markets (2.1 per cent) than in the capital cities (2 per cent), the report showed.
Experts have described the popular drift to regional areas amid COVID-19 and remote work as one of the biggest trends of the 21st century.
“Regional areas generally recorded less of a decline in housing values through the worst of the COVID period last year, while also showing an earlier and stronger growth trend through the second half of last year,” the report said.
However, despite the upswing on house values, unit prices have demonstrated relatively weaker performance.
House prices have risen 4.4 per cent over the last three months, a rate more than three times higher than units, which have risen just 1.4 per cent in the same time period.
“There are some tentative signs this trend could become less obvious, with Sydney unit values recording their first month of growth since April last year and Melbourne unit values recording their largest gain since late 2019,” the report said.
Spotlight on Sydney
New data from Domain reveals that home values in Harbour City have been growing consistently for months.
Over the December quarter of 2020, Sydney house prices jumped by 4.8 per cent, underscoring the "resilience" in the city's property market, the report said.
But the gap between house prices and unit prices have also widened, the Domain report acknowledged.
"Weaker investor activity has disproportionately impacted unit prices because they tend to be the preferred property type. There are also particular locations with increased supply as a result of heightened development in recent years."
"Changed lifestyle preferences post-lockdown and the option of remote working has driven demand to outer suburban and regional locations as buyers seek affordability, liveability, space and greater value for money."
And new realestate.com.au figures show that the number of $3-million-dollar suburbs in Sydney have risen to nearly 60.
Sydney already has 10 suburbs where the average house price is $3 million or more. That's compared to the rest of the entire country, which only has three other $3 million suburbs (two in Melbourne and one in Canberra).
But there are 17 other Sydney suburbs where median house prices hover between $2.5 million and $2.97 million that are expected to join the prestigious ranks by the end of the year.