House prices surge in February, sending most capitals back to record levels
Home price rises across every capital city except Darwin drove national dwelling prices 1.1 per cent higher last month, with five capital cities now recording record-high property values.
A 1.2 per cent rise for Melbourne prices last month was enough to send that city to record-high values, erasing an 11 per cent fall in values since the previous peak in late 2017.
Despite a 1.7 per cent price jump last month, Sydney home values remain 3.7 per cent below their mid-2017 peak, having fallen 15 per cent during the downturn that ended mid-last year.
Although, even while Sydney prices remain below their previous peaks, the median house price in the city has risen above a million dollars.
Brisbane, Canberra, Hobart and Adelaide are the other capital cities where home prices are at record highs.
Perth home values rose 0.3 per cent last month and have not fallen for four months.
However, CoreLogic’s head of research Tim Lawless said he was not anticipating a return to record-high prices for a very long time in the west.
“Although Perth values are now trending higher, the recovery period is likely to be a long one, with Perth housing values remaining 21 per cent below their peak,” he wrote in a report.
Meanwhile, Darwin home prices fell another 1.4 per cent and are now down a third from their peak values.
Regions lag behind cities, except in Tasmania
Regional markets posted a much lower price increase of 1.4 per cent, but Mr Lawless said the average masked substantial differences between areas.
“The diversity across regional Australia is extreme, with drought-affected areas impacting the regional index,” he wrote.
“Meanwhile, the regional centres adjacent to the largest capitals, as well as coastal lifestyle markets, show a stronger performance.”
In particular, Mr Lawless said Tasmania’s regional markets made up three of the top four non-capital city markets.
“Tasmania’s home values have been rising swiftly, with housing values rising faster across regional Tasmania than Hobart,” Mr Lawless added.
CommSec’s senior economist Ryan Felsman said real estate was looking like an increasingly attractive investment, with interest rates at record lows and share markets tumbling.
“So where do investors seek shelter in a low-interest rate environment?” he questioned in an analysis of the data.
“Well, record-low mortgage rates, rising home prices, strong auction clearance rates, limited housing supply, improving access to home loans and now financial market volatility are encouraging Aussies to return to the property market,” he wrote.
However, Mr Lawless said owner-occupiers were continuing to dominate the market, while rental returns remained historically low in many areas, with rents growing an average of just 1.4 per cent over the past year.