CoreLogic has released its full dwelling values results for February, which confirmed that a synchronised boom has developed with every capital city market and Australia’s regions reporting strong price inflation.
The results are summarised in the table below:
The 2.1% price growth nationally was the strongest month-on-month increase since August 2003:
According to CoreLogic’s research director, Tim Lawless:
“The last time we saw a sustained period where every capital city and rest of state region was rising in value was mid-2009 through to early 2010, as post-GFC stimulus fueled buyer demand”.
The comparison with the post-GFC experience is apt given we witnessed similar conditions to now, namely:
- Cratering mortgage rates; and
- Massive household and housing stimulus.
Tim Lawless also believes the mismatch between supply and demand is another key factor pushing prices higher:
“Housing inventory is around record lows for this time of the year and buyer demand is well above average. These conditions favour sellers. Buyers are likely confronting a sense of FOMO which limits their ability to negotiate. Vendor discounting rates were estimated at a record low of 2.6% in February, and auction clearance rates have consistently been in the high 70% to low 80%, which is well above average.”
This dearth of housing stock is illustrated clearly in the next chart showing listings levels well below 2016 to 2020:
At the same time, house sales volumes are running way above the decade average:
The upshot is that “Australia’s housing market is now well entrenched in one of the strongest growth phases on record” driven by:
- Record low mortgage rates;
- Better than expected economy; and
- Record low property supply.
Sure, there are headwinds ahead, including:
- Reduction in fiscal support and the ending of mortgage holidays; and
- Stalled immigration.
But overall, the ingredients are in place for a booming 2021, which will likely continue well into 2022.