Australian Housing Values Reach Record High
Written on the 30 March 2021
Housing values continue to rise through 2021 with the national value increasing by 0.9% over the month of January.
The increase in January and the continual growth of pricing places Australian property values at a record high with the value surpassing the levels seen pre covid by 1%. The value is higher by 0.7% when compared with the October 2017 peak.
All capital cities and most state regions enjoyed a rise in housing values throughout the month with increases ranging from Darwin's mammoth 2.3% to Sydneys and Melbourne's conservative 0.4%.
During the early stages if the pandemic a growing trend was the increase in regional housing values. This has continued in early 2021 with the area growing at twice the levels seen in capital cities. Regional housing values increased by 1.6% when compared with capital cities increase of 0.7%. Since March 2020 and during the initial onset of COVID-19, regional growth has surpassed 6.5% growth, compared to capital cities values down – 0.2% when compared over the same period.
The largest cities growth are being dwarfed by its regional counterparts, with regional pricing in most areas increasing at three times the pace. In regional Victoria prices increased by 1.6% and in regional NSW it was 1.5% for the month of January compared with city growth of 0.4% for there capital cities.
The increase in regional pricing is most prevalent for NSW and Victoria when compared with its capital cities. One major factor for the increase is the migration from capital cities to regional cities/towns and with this housing activity growth. Due to international border closures capital cities have been hardest hit by the lack of international migration activity. The biggest drivers of migration from city to regional areas is affordability, lifestyle change and a lower housing density and the recent development of remote working environments.
Housing pricing and growth are currently outperforming units over the past 6 months, with the national increase of 3.5% trumping unit's which are currently unchanged. Over the past 3 months housing has outperformed units in all major cities.
During the Covid-19 pandemic units have received slower demand when compared to housing due to the change in lifestyle where we are home more often and desire more space and due to the lack of investor participation. Oversupply of units in some areas are also a major factor, with these factors we don't expect units to outperform housing markets for some time.