Australian property prices have been surging since Covid-19 wreaked havoc on the Australian economy in 2020, and it is showing little sign of slowing down. This week our team at Loansuite takes a look at what has happened in the Australian property market over the past 12 months.
Over the month of June, property prices in Australia rose 1.9%, with Hobart experiencing the strongest growth at 3.0%, Sydney at 2.6% and Melbourne at 1.5%. Perth saw the lowest increase over June at just 0.2%. Analysts are suggesting that this is the highest rates of property growth we have seen since the early 2000s. The following chart looks at what happened over the month, quarter and year in each of the key property markets:
Low mortgage interest rates, reducing unemployment, and strengthening consumer confidence data have all been key contributors to the strong property market. Despite a lack of overseas migration, the local demand, particularly amongst owner-occupiers upgrading their homes in this low interest-rate environment, especially while overseas travel is not an option.
The supply of properties listed on the market has also been relatively low, even though we’re starting to see an increase in new listings. The number of advertised properties listed for sale on the market was 25% below the five-year average. Sydney has seen the strongest number of listings at 110,064, followed by Melbourne at 89,234 and Queensland at 80,549.
Rental markets have also seen very strong growth, with rental values increasing by 6.6% across the country. This is the highest rate of growth since February 2009, with Darwin leading the way at a 21.8% increase in the rental value over the 12 month period.
The key questions now are how long the Covid-19 lockdowns will last, and where to next for the Australian property market. We expect that first homebuyer incentives will remain strong to address affordability issues and investors will continue to enter the market, particularly as the Australian Dollar (AUD) starts to decline relative to other currencies. This, we expect, will strengthen demand amongst Australian expats living and working across the globe.
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