Residential property prices continue to climb and although the pace has slowed, experts predict that there is still steam in the booming market.
CoreLogic data released on Wednesday showed home values âârose 1.5% in August, a growth rate still well above average but the smallest monthly increase since January.
It takes Australian home values ââ18.4% above levels of a year ago – the fastest annual growth rate since the year ending July 1989.
In dollars, the rise is equivalent to around $ 103,400, while Australian wages are only increasing at an average annual rate of 1.7 percent.
Research director Tim Lawless said the slowing rate of price appreciation likely had more to do with worsening affordability constraints than the ongoing bottlenecks.
“Housing prices have increased almost 11 times faster than wage growth over the past year, creating a greater barrier to entry for those who do not yet own a home,” he said. declared.
âBlockages have a clear impact on consumer sentiment; however, to date, the restrictions have resulted in lower advertised listings and, to a lesser extent, fewer home sales, with less impact on price growth dynamics.
“It is likely that the continuing shortage of properties available for purchase is at the heart of the upward pressure on home values.”
Median home value in Sydney remains the highest in the country at $ 1.039 million (up 20.9% in the last year), followed by Canberra at $ 816,644 (up 22.5%) and Melbourne at $ 769,968 (up 13.1%).
Excluding Perth, which does not appear in this month’s CoreLogic update as the group investigates “a divergence from other housing market measures,” the cheapest median residential property price is in Darwin at $ 489,248 (up 22 percent).
Unprecedented stimulus, rocketing interest rates and the possible economic recovery have supported continued price appreciation, said Ryan Felsman, senior economist at CommSec.
âExtended closures in Sydney and Melbourne and virus outbreaks elsewhere are likely to slow the rapid pace of home price growth in the remaining months of 2021,â he said.
“But Commonwealth Bank economists still expect national house prices to rise by at least 20% in 2021, with house prices 24% higher and apartments up 9% on the year, âMr. Felsman said.
“National home price growth is expected to slow to around 7% in 2022, driven by gains of 10% in Brisbane and 9.0% in Canberra.”
Rachel Slade, director of personal banking at National Australia Bank, said her company expects the monthly pace of house price growth to slow but remain at a solid pace, amounting to an increase by 18.5% this year and 3.6% in 2022.
âRecord interest rates and government incentives are expected to keep demand strong until 2021,â Ms. Slade said.
“However, we also recognize that rising prices are creating an increasing challenge, especially for first-time homebuyers, as supply remains below average.”
First-time homebuyers were still struggling to enter the market, she suggested, with those clients’ activity at NAB increasing nearly 56% in Australia last year.
âThe most recent launch of the First Home Loan Deposit Scheme and its broader suitability saw a 25% increase in first-time homebuyer activity in July,â added Ms. Slade.
Senior ANZ economists Felicity Emmett and Adelaide Timbrell recently raised their forecast for property price growth in Australian capitals this year to just over 20%, from 15-20% previously.
Meanwhile, housing affordability advocacy group Everybody’s Home said rents jumped 8.2% in the 12 months to Aug.31 – the biggest increase since 2008 – and has again called for more social housing.