Australian housing prices increased at their fastest quarterly pace on record according to data released by the ABS this morning. Nationally, the average capital city median price advanced by 6.7% in the June quarter, with the pace stepping up from the strong rates of growth seen in the previous two quarters. Properties were transacting at "an increasingly rapid rate" through the quarter as policy stimulus measures were driving demand at a time when stock on the market remained at low levels, the Bureau's Michelle Marquardt said. This has seen housing prices rise 16.8% since the national lockdown last year.
Significant price rises were seen across the capital city markets in the June quarter, as the effects of policy stimulus from low interest rates, first home buyers incentives and the HomeBuilder scheme continued. Canberra posted its strongest quarterly rise on record (8.2%) while the uplift in Hobart prices (6.3%) was the highest going back to 2003. Prices in Melbourne (6.1%) advanced by their most since 2009 and gains of more than 5% were reported in the Brisbane and Adelaide markets, a pace last seen in 2007. Strong conditions in the Sydney market accelerated prices by 8.1% in the quarter, its strongest result in 6 years.
Nationally, house prices (7.7%q/q, 19.8%Y/Y) extended their outperformance over the unit segment (4.3%q/q, 9.3%Y/Y), a trend that was in place ahead of 2020 and then accelerated by the onset of the pandemic. A stimulus response more targeted at detached housing, work from home arrangments, the desire for more space, and the closure of the international borders appear to be the factors behind this. The balance may be starting to shift in some markets, with unit prices lifting by more than house prices in Darwin and Hobart in Q2, while the recent increase in investor activity is likely to boost unit prices further, but the overall trend is still firmly in place.
The return to lockdowns in the two major markets in Sydney and Melbourne appears to have slowed conditions there, with the pace of price rises in CoreLogic's series moderating over the past couple of months. That has weighed on price growth nationally, though it was still running at a strong pace at 1.5%m/m in August.
