Australian house prices have experienced their biggest monthly rebound in two and a half years, led by a strong recovery in the Sydney and Melbourne property markets.
The nation’s median dwelling value lifted 0.9 per cent to $524,744 in September, according to the latest monthly figures from property analyst CoreLogic.
“Although housing values are now consistently tracking higher, at least at a macro level, the national index remains 6.8 per cent below the October 2017 peak,” said CoreLogic’s head of research, Tim Lawless.
He said this indicated “buyers still have some time to take advantage of improved housing affordability before values return to record highs”.
Median property values in Sydney and Melbourne jumped 1.7 per cent last month — to $805,424 and $634,913 respectively.
In the past quarter, dwelling values in the two most expensive markets rebounded by about 3.5 per cent each.
The only other capital cities that saw price rises in September were Canberra (+1pc) and Brisbane (+0.1pc).
Adelaide’s housing prices remained flat, while Darwin (-0.2pc), Hobart (-0.4pc) and Perth (-0.8pc) values fell during the month.
What’s driving the recovery?
“Low mortgage rates, and the expectation that they will move lower, along with better affordability, a loosening in credit rules and improved housing sentiment are all factors contributing to the rebound,” Mr Lawless said.
“A variety of other indicators outside of our hedonic index are pointing towards further strength in the housing market, including auction clearance rates, which are continuing to track around the mid to high 70 range, with the results remaining high on larger volumes.”
As for why Sydney and Melbourne are outperforming the other capitals’ property markets, Mr Lawless said it was due to their stronger population growth, lower unemployment and strong jobs creation.
“Although markets outside of Sydney and Melbourne aren’t showing the same recovery trend, most areas have either seen a reduction in the rate of decline or are seeing a modest trajectory of growth as low mortgage rates and a slight loosening in credit policy support buyer demand.”
Another point of difference, he observed, was the strong level of investor participation.
The most recent housing finance figures (July), showed that 32 per cent of mortgage demand in NSW was from investors — far higher than any other state. In Victoria, 26 per cent of mortgages were taken out by investors.
Furthermore, the CoreLogic figures showed the sharpest price rises were happening in the most expensive quartile of the national market.
Prices in the top end of the market lifted by 3.6 per cent in the past quarter — while the lowest-priced quartile saw prices rises of 1.4 per cent.
Ref: business reporter David Chau (on 01 October 2019). Property prices rebound, led by Sydney and Melbourne spring sales. Retrieved from https://www.abc.net.au/news/2019-10-01/property-price-rebound-sydney-melbourne-corelogic/11562824