It was once considered the affordable alternative to the mad Sydney and Melbourne real estate market. But this is coming to an end.
Supply is down and demand is on the rise in the Australian property market, with properties selling tens of thousands of dollars above asking price as buyers battle for a property.
“It’s definitely a sellers market,” Real Estate Australia chief economist Nerida Conisbee told news.com.au.
Record interest rates along with our changing saving habits in the wake of the COVID-19 pandemic are behind the boom.
“We had record savings rates during COVID, which gave people a lot more money to deposit as well as record interest rates and access to finance became easier,” he said. she explains.
Ms Conisbee added that competition among banks continues to drive down interest rates as the economy begins to recover with a recovering unemployment rate.
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Australians recognize real estate as a solid investment option, with many buyers turning to the city’s outlying seaside areas as our way of life and working arrangements have changed during the pandemic.
Shoppers line up in regional and coastal areas outside of major capitals, such as in northern New South Wales, Geelong, Woollongong and along the Sunshine Coast, while popular Byron Bay continues to thrive on the real estate market, up 40%.
âTwo areas that have seen the strongest growth in capital cities are the Mornington Peninsula and the Central Coast (NSW), which have grown 10% in the past 12 months,â Ms. Conisbee said.
Regional areas saw an average increase of 1.6% last month, up 7.9% in the last 12 months, while the combined capitals increased by 1.7% in the last year, according to the latest data from CoreLogic.
Data shows house prices in the Grampians of Victoria, Noosa and the Noosa hinterland in Queensland, the Yorke Peninsula in South Australia and Maranoa in southwest Queensland have jumped by at least 13% last year. The Victoria Grampians had the biggest increase in house prices, rising 16.6% in the past 12 months.
Prices in the capital are still down from pre-COVID levels, but only about 0.2%, while regional home prices have jumped 6.5%.
Ms Conisbee added that small capitals like Adelaide, as well as Canberra and Perth, are doing well in comparison.
The Adelaide housing market had often been viewed as an affordable option compared to the more expensive markets in Sydney or Melbourne in the Eastern States.
At the end of 2020, the average house price in Adelaide hit an all-time high, peaking at $ 510,000, while some properties in the capital are selling for around $ 100,000 above asking price.
âThe median price has reached a new record and sales volume has increased significantly in metropolitan Adelaide and across the state,â the South Australian Real Estate Institute said in its December quarter report.
“It’s a testament to South Australia’s reputation as one of the safest, most affordable and liveable places in the world,” the report said.
RBA Governor Philip Lowe also recently pointed out that house prices were on the rise despite the pandemic.
âRight now the focus is on housing prices going up again,â Dr Lowe said. âThe national house price index is now what it was four years ago. We are back to where we were at the start of last year.
The latest figures from CoreLogic show that national average house prices are now 1% higher than before the COVID-19 pandemic and 0.7% higher than the previous peak in September 2017.
The Australian Bureau of Statistics has highlighted how first-time homebuyers have been a driving force behind the recent price rally.
ABS data shows first buyer’s loan commitments jumped 9.3% in December and 56.6% in the past year.
âFederal and state government measures, such as HomeBuilder, and historically low interest rates are supporting continued growth in home loan commitments. ABS Finance and Wealth Manager Amanda Seneviratne said.