Australian property prices have surged at the fastest monthly pace in 32 years as the fear of missing out saw buyers pile into bricks and mortar.
Record-low interest rates, far from making homes more affordable, have caused house and apartment values to climb in every capital city market.
National dwelling values, in both the city and regional areas, rose by an average 2.8 per cent in March, the fastest monthly gain since October 1988, new CoreLogic data has revealed.
In Sydney, the median house price soared by an even more dramatic 4.3 per cent to a new record high of $1.113million, with upmarket suburbs leading the charge higher.
Australian property prices have surged at the fastest monthly pace in 32 years as the fear of missing out saw buyers pile into bricks and mortar. In Sydney, the median house price soared by an even more dramatic 4.3 per cent to a new record high of $1.113million. Pictured is a house at Merrylands in the western suburbs
Dwelling prices in Australia’s most populated city, taking in both houses and apartments, climbed by 3.7 per cent to $928,028, marking the fastest monthly growth since 1988.
Sydney property prices are now 2.6 per cent above record set in 2017, before a crackdown on investor and interest-only loans sparked a two-year downturn.
The post-Covid recession surge in Australia’s most populated city has more than made up for the 14.9 per cent plunge that occurred between 2017 and May 2019, when a federal election was held, and the 2.9 per cent fall during the 2020 coronavirus shutdowns.
Melbourne, which struggled in 2020 as a result of the three-month city-wide lockdown, saw its mid-point house price last month climb by 2.6 per cent to a new record high of $859,097.
Brisbane’s equivalent value also increased by 2.6 per cent to a record $607,969.
Hobart house prices rose by 3 per cent to an all-time high of $584,974, making the Tasmanian capital more expensive than Adelaide, Perth and Darwin.
Canberra’s median house price climbed by 3.3 per cent to $819,707, another record.
CoreLogic’s research director Tim Lawless said the fear of missing out was certainly a factor with demand consistently outweighing the advertised supply.
‘Such a rapid rate of absorption is keeping overall inventory levels low and adding to the sense of FOMO amongst buyers,’ he said.
Melbourne, which struggled in 2020 as a result of the three-month city-wide lockdown, saw its mid-point house price last month climb by 2.6 per cent to a new record high of $859,097. Pictured is a house at Werribee in the city’s west
The price surges occurred in every state and territory capital city with Adelaide’s median house prices rising by 1.6 per cent to a record $518,692.
Perth’s equivalent values rose 1.8 per cent to $527,833 while Darwin’s mid-point house prices increased by 1.9 per cent to $519,575.
Both cities are the only capital city markets year to hit record highs, with prices still below the 2014 peak.
Everybody’s Home, a group campaigning for more social housing, said the surge in property values was putting housing beyond the reach of both aspiring buyers and renters.
‘Higher house prices fuelled by cheap money will lead to increased costs in the rental market, worsening affordability,’ spokeswoman Kate Colvin said.
Ms Colvin said the end of the last six-month mortgage repayments holidays would see struggling borrowers forced to sell, following the end of JobKeeper wage subsidies and the $150 coronavirus boost to JobSeeker unemployment benefits.
Hobart house prices rose by 3 per cent to an all-time high of $584,974, making the Tasmanian capital more expensive than Adelaide, Perth and Darwin. Pictured is a house at Geilston Bay
‘This is only going to get worse with the end of JobKeeper and the reduction of JobSeeker this week, plus the deadline for mortgage deferrals passing yesterday,’ she said.
‘We’re now bracing for what could be the biggest economic shock since the pandemic itself and by promising to build more social and affordable housing, the federal government can secure our future and prevent an intergenerational housing crisis from worsening.’
The Reserve Bank of Australia in November cut interest rates to a new record-low of 0.1 per cent, and governor Philip Lowe has consistently promised to keep them there until 2024.
Three of Australia’s big four banks are offering fixed mortgage rates of less than 2 per cent and ANZ is predicting a 17 per cent house price increase across the capital cities in 2021 alone.
The bank is expecting Sydney to see an even bigger 19 per cent surge.
Canberra’s median house price climbed by 3.3 per cent to $819,707, another record. Pictured is a house at Flynn
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