Domain has released its median property results for the December quarter, which shows that Australian house prices have hit a record high:
National house prices leapt to new record highs at the end of 2020…
With the median house price in Sydney now at an all-time peak of $1,211,488, Melbourne’s at $936,073 and Canberra’s at $855,530, every capital city recorded massive growth over the past year.
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Only Darwin and Perth ended up shy of their previous price peaks.
The latest Domain House Price Report, released on Thursday, revealed that nationally, median house prices rose 4.1 per cent over the December quarter to $852,940 — the steepest quarterly jump in four years…
And that phenomenal growth is set to continue, said Domain senior research analyst Nicola Powell…
“With the historically low interest rates likely to stay for the near future, we’d expect this level of activity to continue, so we’ll see more price growth throughout 2021…
“We might see a price decline in certain areas that are more vulnerable, like in the inner-city rental market and the CBDs, particularly Sydney and Melbourne, but when international borders re-open, we’ll see migration and overseas students return, and prices recover.
Domain’s property price index uses a stratified median price method, which controls for changes in the composition of properties sold by separating the total sample of properties into a number of geographical sub-samples, and then into different strata based on the long-term average price level of properties in those regions.
By comparison, CoreLogic uses a hedonic methodology, which measures price changes for both detached houses and units on a like-for-like basis according to their key attributes, such as location, land size, number of bedrooms and bathrooms, and so on.
CoreLogic’s 5-city index remained around 2.6% below its September 2017 high. It also recorded far softer growth over the December quarter:
It also recorded much softer growth over the 2020 calendar year:
Regardless, all major property price indices are pointing to a strengthening property market.
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
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