The total value of Australia’s housing market surged to a new high of $9.9 trillion in the December quarter, adding $512.6 billion in just three months – or $5.7 billion a day from September 2021 – preliminary estimates from the Australian Bureau of Statistics show.
The steep jump in residential real estate valuations came after dwelling prices soared 23.7 per cent nationwide during the 12 months to December – the largest annual increase since the ABS started tracking the sector in 2003.
Hobart outperformed with 29.8 per cent annual growth, followed by Canberra with 28.8 per cent and Brisbane with 27.8 per cent. Sydney notched up 26.7 per cent while Adelaide added 23.9 per cent.
Hobart, Canberra, Brisbane, Sydney and Adelaide all posted their biggest annual gains on record, while Melbourne’s 20 per cent growth was the highest annual increase since the June 2010 quarter.
Perth rose 15.7 per cent and Darwin was up by 13 per cent for the year.
House prices jumped 27.5 per cent, significantly outpacing units, which racked up 14 per cent growth.
In the three months ended December, national dwelling values rose by 4.7 per cent, down from the 5 per cent gain for the previous quarter. The later period coincided with the omicron outbreak.
Sydney recorded slower growth of 4.1 per cent after values had risen by 6.2 per cent in the September quarter. Hobart rose by 6.5 per cent, also lower than the 8.2 per cent it gained during the previous quarter.
By contrast, Melbourne rose 0.3 percentage points to 3.9 per cent while Brisbane jumped 3.5 percentage points to 9.6 per cent – the biggest quarterly gain across the capitals.
Adelaide home values increased by 0.9 percentage points to 6.8 per cent, Canberra added 0.4 percentage points to 6.4 per cent and Perth was up 0.9 percentage points to 2.9 per cent.
ABS head of prices statistics Michelle Marquardt said the results were consistent with a range of housing market indicators.
“New lending commitments for housing rose to a record high value in the December quarter 2021,” Ms Marquardt said.
“Days on market fell and sales transaction volumes increased. Record low interest rates and strong demand have continued to support growth in property prices.”
But the outlook for the rest of the year is notably weaker amid rising interest rates on fixed mortgages and worries about inflation and the war in Ukraine.
The Commonwealth Bank has downgraded its house price targets for Sydney and Melbourne to end this year with a 3 per cent fall after these markets slowed faster than expected. The bank is now expecting prices to finish the year broadly flat nationwide.
“Sydney and Melbourne are forecast to end the year lower given prices are expected to have already peaked,” Gareth Aird, CBA’s head of Australian economics, wrote.
“With rising global uncertainty and the potential for weaker consumer sentiment amid tighter monetary policy settings, the downside risk for housing markets has become more pronounced in recent months.”
Article Source: www.afr.com