Australian housing markets closed 2021 with a bang, with Brisbane and Adelaide showing no signs of slowing down as values continue to hit new highs.
CoreLogic’s latest Hedonic Home Value Index showed a monthly increase of 1% and an annual increase of 22.1% in home values across Australia.
While overall monthly gains have continued to moderate from highs reached earlier in the year, Brisbane, Adelaide and regional Queensland are the only broad regions where there is no evidence yet that value growth is slowing.
Home values rose 2.9% in Brisbane and 2.6% in Adelaide, significantly ahead of Sydney’s 0.3% gains.
CoreLogic’s research director, Tim Lawless, said these cities are less of a affordability challenge than their larger counterparts and have favorable conditions, with Queensland benefiting from strong interstate migration.
“In addition, we have not seen the same level of supply response in other regions, with the trend in advertised supply in these markets remaining well below average,” he said.
Sydney and Melbourne reported a slowdown in the last month of 2021, with the latter even recording the only monthly decline in house prices of 0.1%.
These two cities reported their softest monthly reading since October 2020.
“A wave of newly advertised listings through December has been a key factor in taking some heat out of the housing markets in Melbourne and Sydney, along with some headwinds in demand caused by significant affordability constraints and negative interstate migration,” said Mr Lawless.
Overall, the combined monthly growth of 0.6% in capital cities pales in comparison to the 2.2% increase in regional areas.
Regional house prices appeared to be gaining momentum again, with regional Queensland as a clear high point as prices rose 2.4% in the region.
Over the year, however, the strongest regional markets were New South Wales and Tasmania, both of which posted close to 30% gains.
In the most popular regional markets, home values are up more than 30% in the calendar year, with the Southern Highlands and Shoalhaven posting the highest annual home value gains at 37.7%, followed by Queensland’s Sunshine Coast at 33.7 %.
“It is likely that regional markets, especially those with a lifestyle appeal, will continue to benefit from increased demand as remote work policies become more normalized and demand for vacation homes remains strong despite ongoing international border restrictions,” Lawless said.
Photo by @tomchill on Unsplash.
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