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Strongest annual property price growth in 18 years

Mar 26, 2022 |TEAM FUTURERENT

Some fascinating numbers out this week from the Australian Bureau of Statistics: property prices logged the strongest annual growth over 2021 since ABS records began in 2003.

Clearly, even a global pandemic hasn’t been enough to slow our property market – though there are signs sentiment might be changing.

Your 10-second news wrap

  • Buyer demand in the property market is showing signs of moderating from the extreme levels seen in 2021. This is affecting Sydney and Melbourne more than the other capital cities. In February, Sydney saw its first drop in housing values (-0.1%) since September 2020, while Melbourne prices were flat, CoreLogic data showed.
  • While there has been a recent rise in capital city listings, supply in regional areas is still lagging behind – this is propping up growth. Prices in the combined regional markets were up by 5.7% between December 2021 and February 2022. This is more than 3x the growth recorded for the combined capitals (1.6%).

What does this mean for you?

More listings mean more choice for buyers, who can then take their time to shop around.

However, when looking at the bigger picture, current supply levels in Sydney are still 4.2% below the 5-year average. In Brisbane and Adelaide, where growth is stronger, listings are more than 40% below the 5-year average. This long-term indicator suggests that market momentum is unlikely to drop off significantly.

Looking at regional markets, the sea/tree change trend is expected to slow or even reverse. This is likely to affect price growth in these areas and property investors thinking of chasing profit in the regions would be wise not to expect the same growth rate seen in the past 2 years.

Fact of the week

The top 5 least affordable housing markets in the world

  • Sydney and Melbourne rank 2nd and 5th respectively in the world’s most unaffordable cities for property buyers, according to Demographia’s International Housing Affordability 2022 Edition. Hong Kong took out the top spot.
  • Expensive house prices in Sydney and Melbourne are the result of record growth during the pandemic. However, values are looking up in other more affordable capital cities including Canberra, Brisbane, Adelaide, and Perth – providing solid investment opportunities for property investors.

More quick news

  • The unemployment rate has fallen again to 4% in February, plunging to its equal lowest level in 47 years.
  • Unit sales are trumping houses at auctions in Sydney, Brisbane, Adelaide, and Canberra. In Sydney, the price gap between houses and units sold under the hammer is a staggering $870,850.
  • The vendor of this 2-bedroom “fibro asbestos shack” in North Beach, 2 hours from Adelaide, thought she’d be lucky to get anything in the $700,000 bracket. It went for $930,000 under the hammer.

At a glance: prices & rents

-- Houses --

-- Units --

*Source: CoreLogic - March 2022.

  • The performance of property prices has been mixed across the capital cities, with Sydney and Melbourne showing slight declines. Prices are generally still rising across the other capital cities albeit at a more modest pace.
  • Over the month, values for both houses & units grew in Brisbane, Adelaide, Perth, Canberra, and Darwin. Over the past year, most capital cities still showed double-digit growth across both the house and unit markets.

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