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Jan 24 , 2022
Property prices surged in 2021 despite slowing growth throughout much of the year.
A new report from CoreLogic has revealed that house prices across Australia rose 22.1 per cent last year, the biggest gain since 1988.
The median national property price rose 1 per cent to $709,803 in December, the 15th consecutive monthly rise but lower than the 1.3 per cent rise recorded in November as growth continued to slow from a high of 2.8 per cent reached in March.
Growth in the combined capital cities for the month was 0.6 per cent, overshadowed by a surge of 2.2 per cent seen in the regional areas of the country.
Melbourne was the worst performing capital city with a fall of 0.1 per cent and a median house price of $795,018, followed by Sydney, which rose only 0.3 per cent with a median price of $1,098,412.
CoreLogic said that this was the softest monthly growth for both cities since October 2020.
“A surge in freshly advertised listings through December has been a key factor in taking some heat out of the Melbourne and Sydney housing markets, along with some demand headwinds caused by significant affordability constraints and negative interstate migration,” CoreLogic research director Tim Lawless said.
Meanwhile, two other capital cities bucked the trend of slowing growth in December: Brisbane with a rise of 2.9 per cent to $683,552 and Adelaide with a rise of 2.6 per cent to $569,882.
“These regions show less of an affordability challenge relative to the larger capitals, as well as better support for housing demand with Queensland in particular showing strong interstate migration,” said Mr Lawless.
“Additionally, we haven’t seen the same level of supply response seen in other regions, with the trend in advertised supply remaining well below average in these markets.”
Hobart led the capital cities in property price growth in 2021 with a rise of 28.1 per cent, followed by Brisbane (27.4 per cent), Sydney (25.3 per cent), Canberra (24.9 per cent) and Adelaide (23.2 per cent).
Perth experienced the slowest growth of 13.1 per cent, while Darwin (14.7 per cent) and Melbourne (15.1 per cent) also fell behind the average capital city rise of 21 per cent.
Dwelling values in regional areas grew 25.9 per cent throughout the year, with particularly strong growth in regional NSW (29.8 per cent) and regional Tasmania (29.5 per cent).
The Southern Highlands and Shoalhaven in NSW (37.7 per cent) and the Sunshine Coast in Queensland (33.7 per cent) were among the best performing regional areas.
Commenting on the data from CoreLogic, AMP Capital chief economist Dr Shane Oliver said storm clouds were gathering for Australia’s property market boom.
“We expect a further slowing in national home price gains ahead of a peak and then price falls from later this year and in 2023,” he said.
Prices will rise 5 per cent in 2022 before a decline of 5-10 per cent in 2023, according to AMP Capital, while a “wide divergence” between different capital city markets may continue.
“Melbourne prices may have already peaked; Sydney prices are likely to peak by mid-year; but laggard cities like Brisbane and Adelaide and possibly Perth and Darwin which are less constrained by poor affordability are likely to be relatively stronger this year,” said Dr Oliver.
In a survey late last year, NAB found that only 25 per cent of Australians believed it was a good time to buy a home.