House prices… is the only way up?

House price gains have eased off but are still around six times the historical average monthly rate of growth, accordingly to CoreLogic figures outlined in a recent ABC News article.

Key points of the article included the fact that regional areas had similar growth rates compared with capital cities for the month of April, and overall house prices rose an average of 1.8 percent across the country.

However, smaller capitals and regional areas had stronger growth rates over the past 12 months.

Capital Cities

Nationally, the biggest monthly increases for April were in Darwin (2.7 per cent), Sydney (2.4 per cent) and Adelaide (2 per cent) – with all capitals posting much stronger-than-average gains.

CoreLogic’s Eliza Owen said “very low mortgage rates and relatively strong demand is seeing this kind of sustained growth in the housing market, even though that momentum is coming off a little bit”.

CoreLogic reported also that there was already some evidence of fewer first-time buyers in the market, with the Australian Bureau of Statistics reporting a -4.0% fall in the value of first home buyer home loans through February, the first drop since May last year.

It also reported that the four smallest capital cities recorded double digit annual growth (Adelaide 10.3%, Hobart 13.8%, Darwin 15.3% and Canberra 14.2%), reflecting a smaller COVID-related disruption and an earlier start to the growth phase last year.  Melbourne is recording the lowest level of annual growth (2.2%) due to a larger downturn, attributable to the extended lockdown period last year. 

CoreLogic researcher Tim Lawless also said “a preference shift away from higher density housing during a global pandemic is understandable, however a rise in flexible working arrangements also seems to be supporting greater demand for houses around the outer-fringes of capital cities.  

“Relatively weak investor activity, compounded by a supply overhang in some high-rise precincts, is also dampening price growth in unit markets,” he said.

Regional Strength

CLK Director Troy O’Brien said we are still seeing some impressive sales prices across the Echuca Moama region, which reflected the latest CoreLogic results for April.

“Regional and lifestyle locations (like Echuca Moama) are continually showing more strength than our city counterparts, which is a reflection of lifestyle changes and choices buyers made post COVID1-19 lockdowns,” Troy said.

“We are expecting more properties to come onto the market in the coming months, which will be good for buyers who are looking to get into the market,” he said.

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