The CoreLogic National Property Index
jumped into action in November, recording its fifth straight monthly increase
and largest monthly gains in over 16 years. While parts of the national market
remain slow, values in Sydney, Melbourne, and Hobart continue to grow beyond
expectations. The downturn that defined the Australian market at the start of
the year seems like a distant memory, with some experts expecting other state
capitals to join the party in 2020.
Property values in Sydney and Melbourne
continue to lead the charge, with prices in November up 2.7% and 2.2%
respectively compared to the month before. Melbourne was up 2.2% for the year
at $666,883, with Sydney up 1.6% at $840,072. The heated Hobart market jumped a
massive 2.3% over the month, followed by Canberra at 1.6%. The rest of the
country was much more subdued; with Brisbane, Adelaide, and Perth all recording
gains between 0.8% and 0.4% for the month. Darwin was the only state capital to
experience negative growth at -1.2%, which puts annual growth in the northern
capital at a worrying -10.9%.
Overall, national values were up 1.7% for
the month, which is the largest monthly increase since October 2003. Combined
capital city prices also recorded their biggest rise in 16 years at 2%, with
combined regions up 0.5%. After five consecutive months of solid gains, quarterly
results were also strong at 3.8%, 4.6%, and 1.1% respectively. On an annual
basis, Australian property was up ever so slightly by 0.1% to $537,506, with
the capitals up 0.4% to $622,346, and the regions down -1.2% to $380,657.
According to CoreLogic head of research Tim
Lawless, multiple factors have influenced the current price surge: “The synergy
of a 75 basis points rate cut from the Reserve Bank, a loosening in loan
serviceability policy from APRA, and the removal of uncertainty around taxation
reform following the federal election outcome are central to this recovery...
Additionally, we’re seeing advertised stock levels persistently low, creating a
sense of urgency in the market as buyer demand picks up."
Positive forecasts are also affecting
conditions on the ground, with the housing market likely to remain buoyant
despite an atmosphere of global and domestic economic uncertainty. According to
Mr Lawless, "There’s also the prospect that interest rates are likely to
fall further over the coming months and an improvement in housing affordability
following the recent downturn are other factors supporting a lift in values.”
With more growth currently recorded in premium markets, Mr Lawless also thinks
that "demand is likely to ripple outwards to the more affordable areas.”
While the speed of the turnaround has
caught some people by surprise, including many potential first-home buyers,
current strength in the market is not likely to continue at the same rate.
Despite the Treasurer's never-ending optimism, the Australian economy is in a
fragile state. According to Mr Lawless, “Considering wages and household income
growth remains low, economic conditions are losing momentum, and housing
affordability is once again worsening... there are likely to be some headwinds
in maintaining such a fast recovery."