In a sign that Australian real estate markets have held up well once again against COVID lockdowns and restrictions in several cities last month, average capital city dwelling prices rose 1.6% in July. This increase is the tenth monthly gain in a row.
According to CoreLogic, including regional dwelling prices, national dwelling prices are up 16.1% compared to a year ago, which is their fastest pace since the boom market of 2004.
Meanwhile, average capital city prices are now 11.6% above their previous record high in September 2017. According to research from AMP Capital, they are now up 16% from their recent low last September.
Angus Raine, Executive Chairman Raine & Horne, commented, "Sydney dwelling values proved remarkably resilient with 2% value growth in July 2021 and despite the city spending the entire month in lockdown.
"Also, Melbourne did well too with price rises of 1.3% despite the Victorian capital spending 12 days in lockdown."
All capital cities saw prices rise solidly in July, with Canberra the strongest at 2.6% month on month, followed by Sydney and Brisbane at 2%, according to the data from CoreLogic.
Sydney, where average house prices are up 20.9% so far this year, illustrates the strength of the real estate market.
Shane Oliver, Head of Investment Strategy and Chief Economist, AMP Capital, said, "It would appear that sellers and buyers have learned from last year that the combination of significant government support, which is now back at last year's levels, bank payment holidays and continuing ultra-low interest rates will support the market."
Shane continued, "Housing finance commitments at record highs suggest more demand to come."
Angus Raine agreed, "Previous 'circuit-breaker' lockdowns have generally seen housing values remain resilient. Then once governments lift restrictions, the pent-up demand bucket will flow through to an enormous spring selling season rush to Christmas and even into the new year.” In July, Raine & Horne reported that home appraisals increased by 34% compared to the same time last year, which demonstrated a strong appetite among vendors to sell this spring.
“We’ve seen previous boom spring markets run literally until the 22 December and then start up again early January, leaping over the traditional Christmas holiday season.”
Darwin remained at the head of the capital city pack on the investment front with price growth of 1.7% in tandem with gross rental yields of 5.5% for houses and 6.9% for units.
Meanwhile, regional dwelling prices rose 1.7% in July and are up 19.6% compared to a year ago. CoreLogic's Research Director, Tim Lawless, attributed the strength of regional markets to "their relative strength over the last year reflecting less exposure to the slump in immigration, better affordability and increased buyer interest as people seek to relocate from cities as part of a secular trend towards working from home and a greater focus on lifestyle."