Jack Derwin| Australian Financial Review| 8 November 2019
Property prices are soaring in Australia like it’s 2015.
That may be welcome news for investors, but it’s bound to startle wannabe first home buyers. Not least of which because at this rate, prices look set to hit new heights in the first half of next year.
“If housing values continue to rise at the same rate recorded over the past three months, national dwelling values could reach a new record high in six months’ time,” CoreLogic head of research Tim Lawless said in a note issued to Business Insider Australia.
In just the last quarter, values have jumped by an astounding 2.9 per cent — just under 1 per cent a month. If that pelt was to continue, the losses experienced in the past two years would be entirely regained by about April next year.
Of all the capital cities, Melbourne looks to be the next to set a new record for prices.
“If the current run rate of growth continues, Melbourne’s housing market will recover in January,” Lawless said. “Dwelling values across Melbourne’s Inner precinct were only 1.5 per cent below their peak in October, and this sub-region is on track set a new valuation benchmark by the end of November.”
Brisbane to bounce back
Brisbane, on the other hand, is only experiencing mild gains but due to the nature of its minor correction, will be the second capital to bounce back.
“The past three months of gains – 1.1 per cent or 0.4 per cent per month – has put Brisbane housing values on a path to recover within the next four months,” Lawless said.
Sydney – due to the size of its falls – has a bit longer to wait. Despite prices racing up 5 per cent over the quarter, they now sit about 10 per cent below their 2017 peak.
“Sydney’s housing market is on track to post a recovery within six months, or around April next year if the current pace of growth continues.”
Adelaide, on the other hand, has already hit record highs in its North and South regions, while the rest of the city looks due for a sluggish recovery.
“The same can’t be said of Hobart and Canberra, which are the two capitals where housing values are already at new record highs. Hobart values recorded only a mild correction of 1.3 per cent from peak to trough, with the market reaching a new record high in October 2019,” Lawless said.
The last two cities, Darwin and Perth, have been completely out of sync with the rest of the country since 2014, where they have been floundering in the doldrums.
They’ll just have to watch on in awe as the rest of the country looks set to go mad with real estate fever once again.