Home values trending up across all markets

Australian property markets are set to put the pandemic behind them, with every capital city on the upswing in November and any declines in value in 2020 expected to be regained early next year. 

CoreLogic’s monthly median house price analysis showed gains across the board for the past 30 days, with Darwin and Canberra leading the price growth at 1.9 per cent.

Hobart, Adelaide and Perth also had solid months, with median price growth of 1.4 per cent, 1.3 per cent and 1.1 per cent, respectively.

Melbourne ticked up by 0.7 per cent, Brisbane by 0.6 per cent while Sydney’s median rose by 0.4 per cent, CoreLogic said.

Across markets, auction clearance rates held above 70 per cent in November, well above the 10-year average of 61 per cent.

Private treaty sales are also moving quickly, with the median selling time falling from 57 days in June to 42 days in November.

Discounting has reduced from 3.9 per cent of properties sold in April to 2.8 per cent in November.

If the current trends continue, CoreLogic’s index is likely to surpass its pre-COVID levels in early 2021, head of research Tim Lawless said.

“The national home value index is still seven tenths of a per cent below the level recorded in March, but if housing values continue to rise at the current pace we could see a recovery from the COVID downturn as early as January or February next year,” Mr Lawless said. 

“The recovery in Melbourne, where home values remain 5 per cent below their recent peak, will take longer.”

The data also showed a continued divergence between house and unit performance, with combined capital house values up 1.1 per cent over the past three months, while at the same time unit values fell by 0.6 per cent.

Mr Lawless said the relative weakness in unit markets could be attributed to a combination of low investment activity, higher supply levels in key markets and weak rental conditions in inner city precincts.

“Buyer demand is mostly being fuelled by a surge in owner-occupiers rather than investors, looking to take advantage of historically low interest rates, generous government incentives and an increased state of normality,” he said.

In rental markets, houses also outperformed units in every capital city, but to varying degrees.

The CoreLogic data showed the divergence was most pronounced in Sydney and Melbourne, with rental demand in those cities more reliant on overseas migration.

Perth and Darwin have the tightest rental markets, with rents up 6.6 per cent and 6.1 per cent, respectively, since March 31.

A recovery in Sydney and Melbourne rental markets would likely be dependent on international borders reopening, CoreLogic said.