Colin Brinsden, AAP Economics and Business Correspondent
(Australian Associated Press)
House prices are growing at their fastest annual pace since 1989, although there are further signs the boom is coming off the boil.
CoreLogic’s national home value index rose 1.5 per cent in August to an annual rate of 18.4 per cent.
While the monthly increase was still above average, it was the smallest rise since January.
CoreLogic research director Tim Lawless said the slowing rate of price growth probably had more to do with worsening affordability constraints than ongoing COVID-19 lockdowns.
“Housing prices have risen almost 11 times faster than wages growth over the past year, creating a more significant barrier to entry for those who don’t yet own a home,” Mr Lawless said.
Annual wage growth is currently running at just 1.7 per cent.
“Lockdowns are having a clear impact on consumer sentiment, however, to date the restrictions have resulted in falling advertised listings and, to a lesser extent, fewer home sales, with less impact on price growth momentum,” he said.
He thought an ongoing shortage of properties for purchase would keep upward pressure on prices.
But Commonwealth Securities senior economist Ryan Felsman expects prolonged lockdowns in Sydney and Melbourne, and virus flare-ups elsewhere, are likely to slow the rapid pace of home price growth in the remaining months of 2021.
He still expects annual growth of 20 per cent over the calendar year.
Housing values rose in every capital city in August, apart from Darwin, where they declined 0.1 per cent.
CoreLogic also withheld its index results for Perth and regional Western Australia “pending the resolution of a divergence from other housing market measurements in WA”.
The annual increase of 18.4 per cent in national house prices in August equates to a rise of about $103,400 or $1,990 per week.
This is the fastest annual pace of growth in housing values since the year ending July 1989.
“Through the late 1980s, the annual pace of national home value appreciation was as high as 31 per cent, so the market isn’t quite in unprecedented territory,” Mr Lawless said.
Affordable housing campaigner Kate Colvin from Everybody’s Home said while the economy slows, housing and rent prices continue to soar out of control, locking more and more Australians out of the housing and rental market.
“We know in the coming months that more Australians will continue to struggle financially, yet there will be no relief when it comes to the cost of housing,” Ms Colvin said.
“If prices and rents don’t stop rising during a downturn, it’s unlikely they ever will unless there is significant intervention from the federal government.”
CORELOGIC NATIONAL HOME VALUE INDEX FOR AUGUST
National – up 1.5 per cent, up 18.4 per cent
Sydney – up 1.8 per cent, up 20.9 per cent
Melbourne – up 1.2 per cent, up 13.1 per cent
Brisbane – up 2.0 per cent, up 18.3 per cent
Adelaide – up 1.9 per cent, up 17.9 per cent
Perth – unavailable
Hobart – up 2.3 per cent, up 24.5 per cent
Darwin – down 0.1 per cent, up 22.0 per cent
Canberra – up 2.2 per cent, up 22.5 per cent
Combined capitals – up 1.5 per cent, up 17.5 per cent
Combined regional – up 1.6 per cent, up 21.6 per cent