Home prices across Australia surged 20.3 per cent in the past year in the fastest growth in more than three decades, but there are signs the upper end of the market is cooling off.
Home values jumped by 26.8 per cent in Hobart, 24.4 per cent in Canberra and by 20.2 per cent in Darwin, and Brisbane, Adelaide and Perth notched 19.9 per cent, 19.1 per cent and 18.1 per cent respectively.
Sydney racked up 23.6 per cent growth, while Melbourne’s 15 per cent rise was the slowest growth of any capital.
CoreLogic research director Tim Lawless said Melbourne prices were unlikely to stage another growth spurt when the city’s current COVID-19 lockdown ended, unlike last year.
“I’m not expecting another bounceback in the rate of growth across Melbourne because I think that will be tempered by the rise in listing numbers, with probably quite a bit of pent-up supply that will be coming onto the marketplace,” he said.
“We also know that demand is becoming a little more exhausted and we don’t have the incentives any more and the benefit of overseas migration.
“So any pent-up demand would be counterbalanced by a rising advertised supply level which currently sits just 1 per cent below the five-year average, which is close to what we describe as normal.”
Mr Lawless said growth conditions remained positive but it was becoming clear the housing market had moved past its peak rate of growth in March, when nationally dwelling values increased by 2.8 per cent. Since then, the monthly rate of growth has eased back to 1.5 per cent.
The upper end of the market, which led the recovery, is slowing down fastest.
Since peaking in the three months to May at 12 per cent, the growth rate in the premium segment of the market has slowed to nearly half at 6.3 per cent.
“We’re seeing the upper end of the market losing steam the fastest in the past three months,” Mr Lawless said.
“This is something we’ve seen in the past that the top end tends to lead the upswings and downturns as well, or at least the peaks and the troughs. So, it does look like that starting to occur again.”