Australian housing values lifted by 1.8% in April according to CoreLogic’s national home value index, with the monthly pace of capital gains easing from a 32-year high in March.
Although growth conditions have slowed, housing values are still rising at a rapid pace, up 6.8% over the past three months to be 10.2% higher than the COVID low back in September last year.
With housing prices rising faster than incomes, it’s likely price-sensitive sectors of the market, such as first home buyers and lower-income households, are finding it harder to save for a deposit and fund their transactional costs.
There is already some evidence fewer first-time buyers are in the market, with the Australian Bureau of Statistics reporting a 4.8% fall in the value of first home buyer home loans through February and March.
Despite the slowdown, positive housing market conditions remain geographically broad-based every capital city and ‘rest-of-state’ region continuing to record a lift in dwelling values over the month.
Darwin and Sydney recorded the largest month-on-month rise in dwelling values, while Perth values recorded the lowest rate of growth amongst the capital cities at 0.8%.
The four smallest capital cities recorded double-digit annual growth, reflecting a smaller COVID-related disruption and an earlier start to the growth phase last year.
Melbourne is recording the lowest level of annual growth due to a larger downturn, attributable to the extended lockdown period last year.
The broad trend of houses outperforming the unit sector continued through April as higher density styles of housing experienced less demand amidst elevated supply across some inner-city precincts.
At the combined capital city level, house values have risen at double the pace of unit values over the first four months of the year.
A preference shift away from higher-density housing during a global pandemic is understandable, however, a rise in flexible working arrangements also seems to be supporting greater demand for houses around the outer-fringes of the capital cities and regional locations.
Relatively weak investor activity, compounded by a supply overhang in some high-rise precincts, is also dampening price growth in unit markets.
In a further demonstration of the preference shift away from higher density styles of housing, the past six months have seen house sales tracking 19% above the decade average. Unit sales have also risen over the past six months but are only 6% above the decade average.
Strong selling conditions can also be seen in auction clearance rates, which have held in the upper 70% range throughout April, alongside the fall in median selling times and vendor discounting rates which have now reduced to a record low median of just 26 days to sell a home along with a median discounting rate of just 2.7% across the combined capitals.
from Property UpdateProperty Update https://propertyupdate.com.au/national-housing-market-update-australia/
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