Melbourne CoreLogic Market Update: March 2021
The momentum continued to build across Australian housing markets last month, as values rise at the fastest rate in seventeen years.
Our national index showed housing values surged 2.1% higher in February, which was the largest month-on-month rise since August 2003.
Spurred on by a combination of record-low mortgage rates, improving economic conditions, government incentives and low advertised supply levels Australia’s housing market is in the midst of a broad-based boom.
Housing values are rising across each of the capital cities and the rest of state regions, demonstrating the diverse nature of this housing upswing.
A synchronized growth phase like this hasn’t happened in Australia for more than a decade.
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-global financial crisis stimulus fueled buyer demand.
Sydney and Melbourne were among the strongest performing markets, recording a 2.5% and 2.1% lift in home values respectively over the month, as Australia’s two largest cities caught up from a weaker performance through 2020.
The quarterly trend, however, is still favoring the smaller cities; Darwin housing values rose by 5.5% over the past three months, Hobart values rose by 4.8% and Perth was up 4.2%.
Housing inventory is around record lows for this time of the year and buyer demand is well above average.
These conditions favor sellers and buyers are likely confronting a sense of FOMO which could limit their ability to negotiate.
Vendor discounting rates were estimated at a record low of 2.6% in February, and auction clearance rates have been consistently up in the high 70% to low 80% range, which is well above average.
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