UPFRONT
NEWS ANALYSIS
Buyers not deterred by rising prices House prices have grown at the fastest rate in a decade as buyers take advantage of low interest rates and high household savings – and while rates are on the rise, prices are also likely to keep growing CAPITAL CITY house prices have increased at the highest quarterly rate in a decade, according to the latest figures published by the Real Estate Institute of Australia. The Real Estate Market Facts report found that the weighted average capital city median price increased by 6.8% for houses and 2.7% for other dwellings during the March quarter. Over the 12 months to March 2021, the weighted average median capital city house price increased by 11.1%. With a median house price of more than $1.3m, Sydney is 49.8% more expensive than any other capital city. On the other end of the spectrum, Perth has the lowest average house price; at $500,000, it is 42.8% lower than the national average. Canberra was the only city that did not see an increase in the price of houses. In terms of units, Canberra and Brisbane remained steady, but prices decreased in Brisbane; all other capital cities saw an increase, pushing the average capital city price for other dwellings up by 3% in the year to March 2021. It’s not just prices that are rising. REIA president Adrian Kelly said the average capital city rent for a three-bedroom house increased to a median of $452.50 per week in the March quarter. This is despite the expected trend of people leaving the capital cities as offices relocate,
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employees continuing to work from home, and closed borders still restricting new migrants. Even as prices keep increasing, Australians are buying property at record speed. The REA Insights Housing Market Indicators Report shows that the national average number of days that a property for sale was listed on realestate.com.au dropped from 37 in April to 32 in May. The report also showed that, for the first time, more Australians are looking for properties worth over $1m than under $500,000.
to show strength, with demand outpacing supply in May 2021. “We are seeing properties sell at record speed, so buyers are having to move quickly to compete in these market conditions. While demand may moderate over the coming
“While [buyer] demand may moderate over the winter months, views per listing increased in May and are now just shy of the historic high earlier this year” Anne Flaherty, REA Insights The low cost of debt and high household savings have enabled Australians to buy more expensive properties, with all price categories above $750,000 seeing an increase in the proportion of searches compared the number reported in May 2020. According to realestate.com.au economist Anne Flaherty, the property market continues
winter months, views per listing increased in May and are now just shy of the historic high earlier this year,” she said. While sales have started to slow, they are still well above the levels recorded in 2020. Flaherty expects that the winter market will remain unseasonably active due to continued heightened demand.
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