Property values rose at the fastest pace in 17 years in February.
Data released by CoreLogic on Monday shows home values soared 2.1 per cent over the month as buyers rushed to take advantage of government incentives and record low mortgage rates.
Low advertised stock levels and improved economic conditions also added to the upwards pressure on prices in what CoreLogic described as a “broad-based boom”.
CoreLogic research director Tim Lawless said Australia hadn’t seen a period of synchronised growth like this in more than a decade.
House values are now rising across every capital city and rest-of-state region.
“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-GFC stimulus fuelled buyer demand,” Mr Lawless said.
Sydney and Melbourne experienced the strongest value growth: Prices there rose by 2.5 per cent and 2.1 per cent respectively.
But growth was strong across the board. Over the month, values rose 1.5 per cent in Brisbane, 0.8 per cent in Adelaide, 1.5 per cent in Perth, 2.5 per cent in Hobart, 0.7 per cent in Darwin, and 1.9 per cent in Canberra.
Yet CoreLogic said smaller cities had experienced the strongest price growth over the past three months, with Darwin leading the charge (up 5.5 per cent), followed by Hobart (up 4.8 per cent) and Perth (up 4.2 per cent).
Mr Lawless said it remained to be seen how long the boom would last in Sydney and Melbourne, as affordability concerns were likely to weigh on both markets.
“Both cities are still recording values below their earlier peaks. However, at this current rate of appreciation, it won’t be long before Australia’s two most expensive capital city markets are moving through new record highs,” he said.
With household incomes expected to remain subdued and stimulus winding down, it is likely affordability will once again become a challenge in these cities.”
The pandemic trend of regional price growth outpacing that of capital cities appears to be drawing to a close, too.
Values rose 2.1 per cent in regional areas over the month and 2.0 per cent in capital cities. But the gap between the two has narrowed significantly.
Regional markets recorded smaller price falls during the pandemic as people escaped the cities in search of more space, with values in the regions up 9.4 per cent year on year, compared to 2.6 per cent in the capital cities.
CoreLogic said throughout the COVID period detached housing had proven much more popular than apartments. Over the past three months, house values rose (4.4 per cent) more than three times faster than unit values (1.4 per cent).
But the analytics firm said there are “tentative signs this trend could become less obvious, with Sydney unit values recording their first month of growth since April last year and Melbourne unit values recording their largest gain since late 2019”.