Corelogic National Housing Market Update [video] | June 2021

Housing markets around Australia continued to surge last month with CoreLogic’s national Home Value Index up 2.2%.

The rise in May was a stronger result compared with the 1.8% lift in April, but weaker than the 32-year high recorded in March when values surged 2.8%.

Growth conditions remained broad-based with home values up by more than 1% across every capital city over the month, with both house and unit values lifting across the board.

Of the 334 sub-regions analysed by CoreLogic 97% of them have recorded a lift in housing values over the past three months.

Such a synchronised upswing is an absolute rarity across Australia’s diverse array of housing markets.

Across the capital cities, the monthly change in dwelling values ranged from a 1.1% rise in Perth to a 3.2% jump in Hobart.

Across the non-capital city regions, conditions were more diverse.

Regional NSW led with monthly gains of a 2.5% increase while values in regional WA had the weakest result dipping by one-tenth of a percentage point.

Despite the consistently strong headline results, the underlying trends have shifted over the past year.

The most expensive end of the marketplace is now driving the highest rate of price appreciation across most of the capital cities, whereas early in the growth cycle it was the most affordable end of the market that was the strongest.

From a geographic perspective, it’s the smaller capital cities that led the housing market out of the COVID slump, but now Sydney has risen through the ranks to record the largest capital gain over the past three months with values up 9.3%.

Another trend that is changing is the stronger performance across the regional areas of Australia.

While regional markets led the early stages of the latest growth phase, the performance gap has narrowed substantially between the capitals and the regional areas.

For the second time in three months, growth conditions in capital city home values outspaced the regional markets.

The combined capital city index rose by 2.3% in May compared with a 2.0% rise across the combined regional areas.

Although housing values are now rising the fastest once again in Sydney, at least in trend terms, the annual growth rate is generally higher across the smaller capitals, as well as regional New South Wales and regional Tasmania.

Darwin cracked the 20% annual growth barrier in May, with values now 20.3% higher over the past 12 months.

For Darwin dwellings, this is the strongest annual gain on record.

Housing values across regional New South Wales are up 18.6% while in regional Tasmania values are 18.1% higher.

At the other end of the spectrum, the weakest housing markets over the past year have been in Regional Western Australia where values were flat, and also in Melbourne with a 5.0% lift in values.

In Melbourne, the extended lockdown has created a more significant drag on the annual growth rate.

Low advertised housing supply remains a key factor in the housing market due to proportionately high demand.

Freshly listings added to the housing market have picked up over recent months, with the number of new listings tracking 15% above the five-year average.

Despite the increase in newly advertised residential properties, sales activity has also increased.

CoreLogic estimates sales activity over the three months to May was tracking about 37% higher than the five-year average.

The sales to new listings ratio remain around 1.1, meaning for every new listing there is more than one sale occurring.

This rapid rate of absorption is keeping advertised inventory levels extremely low, despite the rise in new listings.

As a consequence, vendors remain in a strong selling position while buyers have a relatively weak position at the negotiation table.

With housing sales activity continuing to outspace the number of new listings added to the market, the total number of homes advertised for sale remains approximately 24% below the five-year average.

Low stock and high demand are keeping auction clearance rates high and private treaty metrics tight.

Auction clearance rates have held in the mid-to-high 70% range throughout May, fading a little from March when clearance rates were consistently finalising above the 80% mark.

Despite this slightly softer result, May clearance rates were still well above the decade average of 64%.

Median time on the market remains around its record low of 25 days, while vendor discounting rates are also around record lows.

The typical discount from original asking prices was recorded at -2.7% over the past three months.

from Property UpdateProperty Update https://propertyupdate.com.au/national-housing-market-update-australia/