House prices will rise fastest in 32 years in August 2021, despite lockdowns in Sydney and Melbourne
Australian house prices have risen at the fastest pace in 32 years, with Sydney experiencing strong growth despite a prolonged lockdown.
House prices rose 18.4 percent in the year to August, the fastest annual growth rate since July 1989, when Australia had a 17 percent interest rate.
That equated to $103,400 over a year or $1,990 per week, CoreLogic data showed.
Property prices across Australia rose 1.5 percent in August.
Australian house prices have risen the fastest in 32 years, with Sydney experiencing strong growth despite a prolonged lockdown (shown is hotspot Banktown). The value of national homes rose 18.4 percent in the period to August, the fastest annual growth rate since July 1989, when Australia had a 17 percent interest rate.
But in Sydney, house prices rose an even more dramatic 1.9 percent in one month and 26 percent over the year, bringing the average price to a record $1,293 million.
Contrary to the 2020 shutdowns, property prices will continue to rise in 2021, despite Sydney being in lockdown for nearly ten weeks since June 26, with a ban on open house inspections.
In Sydney’s far northwest, in the Baulkham Hills and Hawkesbury area, house prices rose 2.4 percent in August, while prices rose 2.2 percent in the Sutherland Shire.
Canberra was Australia’s best-performing capital, with house prices up 2.4 percent in a month and 25.7 percent in a year, despite closing on August 12.
The median price for a house with a backyard in the national capital now stands at $933,960, only shadowing Melbourne’s $954,496.
In the Victorian capital, house prices rose 1.4 percent in the middle of last month and 15.6 percent a year, in another city on lockdown to fight the more contagious Covid Delta strain.
Property prices across Australia rose 1.5 percent in August. But in Sydney, house prices rose an even more dramatic 1.9 percent. In Sydney’s far northwest, in Baulkham Hills (house pictured), house prices rose 2.4 percent in August
House prices rise despite lockdowns in August
SYDNEY: Up 1.9 percent to $1,293,450
MELBOURNE: Up 1.4 percent to $954,496
BRISBANE: Up 2.1 percent to $691,214
ADELAIDE: Up 2.1 percent to $568,110
HOBART: Up 2.2 percent to $684,737
DARWIN: 0.8 percent down to $572,102
CANBERRA: 2.4 percent up to $933,960
Source: CoreLogic Home Value Index monthly changes for August 2021. Perth figures were not available
CoreLogic’s research director, Tim Lawless, said prices rose despite the lockdown because there wasn’t enough supply on the market.
“Lockdowns have a clear effect on consumer confidence, but so far the restrictions have resulted in declining advertising and, to a lesser extent, reduced home sales, with less impact on price growth momentum,” he said.
‘It is likely that the ongoing shortage of owner-occupied homes is central to the upward pressure on home values.’
Separate data from SQM Research showed that the national housing supply fell 9.6 percent in August to 215,911, a record low.
Across Australia, property prices hit record highs in 69 of Australia’s 78 submarkets, based on a grouping of suburbs, CoreLogic revealed.
The Commonwealth Bank expects national real estate prices to rise 20 percent in 2021, while home values are up 24 percent and apartment prices are up 9 percent.
But it expected this to slow to 7 percent by 2022.
Ryan Felsman, a senior economist at CommSec, the Commonwealth Bank’s online brokerage, said lockdowns would slow price growth.
“Prolonged lockdowns in Sydney and Melbourne and virus flare-ups elsewhere are likely to slow the rapid pace of house price growth in the remaining months of 2021,” he said.
Kate Colvin, a spokeswoman for the social housing advocacy group Everybody’s Home, said real estate price increases, even during lockdowns, showed the federal government needed to build more affordable homes.
CoreLogic research director Tim Lawless said prices rose despite the lockdown because there was not enough supply on the market (pictured is a park in Bankstown in Sydney’s southwest)
“Without more social housing, we are denying low and moderate income Australians the benefits and opportunities of secure housing,” she said.
“Australians cannot live a fulfilling life without access to safe housing. If we want people to have jobs and contribute to the economy, we need to make sure everyone has a place to call home.”
Official national accounts data for the June quarter, mainly covering the period before the Delta lockdowns, showed the Australian economy grew 0.7 percent in three months.
The 9.6 percent annual increase was the largest since records began in 1959, but that capped the 2020 national lockdowns, which plunged Australia into recession with the summer bushfires.
Gross domestic product for the September quarter, which shows the true extent of the lockdowns in Sydney and Melbourne, won’t be released until December 1, when the Australian Bureau of Statistics releases the next batch of data on national accounts.
A contraction in the September and December quarters would plunge Australia into recession for the first time since the early 1980s in two consecutive years.