National housing values rose 4% on average in the quarter of December, making it the most major increase in the housing market in Australia since 2009. Most of the capital cities and regions concluded the year with positive growth. Six of the eight capital cities, and six of the seven areas, reported growth in their median house prices in December.
CoreLogic’s head of research, Tim Lawless, said that while the monthly capital gains trend remained fast-paced, December’s 1.1 percent rise was slower compared to November’s 1.7 percent gain and October’s 1.2 percent increase. “This would suggest that the pace of capital gains may have been dampened by higher advertised stock levels or worsening affordability pressures through early summer,” he said.
“However, the flip side is that housing affordability is set to deteriorate even further as dwelling values outpace growth in household incomes, signalling a setback for those saving for a deposit.”
“The housing value rebound was spurred by a relaxation in borrower serviceability assessments, improved housing affordability, renewed certainty around property taxation policies post the federal election and lower interest rates” says CoreLogic head of research Tim Lawless.
“Lower advertised stock levels persisted, providing additional upward pressure on prices amidst rising buyer activity.”
While Sydney, Melbourne, and Hobart have been the outstanding performers over the last decade, with Sydney topping the list with long-term growth of 67 percent, regional areas have also recorded solid gains.
Following a sharp recovery over the second half of 2019, Mr. Lawless said property investment values were still below their previous record highs across most Australian regions. Over the 10 years, regional Victoria achieved a 35% uplift followed by regional NSW at 31% and regional Tasmania at 24%. These growth rates surpassed the rises in Adelaide (up 17%) and Brisbane (up 9%).