Property price growth at a two-decade high

Residential property prices across Australia have risen over 2021 at the fastest pace in two decades, according to two separate research reports from the Australian Bureau of Statistics (ABS) and the Real Estate Institute of Australia (REIA).

ABS’s residential property price index showed a 23.7% growth across the eight capital cities by the end of 2021, with Hobart posting the highest increase at 29.8%.

This annual growth was the highest reading since ABS started the index in 2003.

Overall, the value of residential dwellings in Australia increased by around $512bn to $9.9tn over the three months to December while the average price of dwellings increased to $920,100.

In annual terms, the total value of residential property in Australia increased by $2.01bn from last year.

ABS head of prices statistics Michelle Marquardt said the gains reported over the last quarter of 2021 was consistent with other market indicators.

“New lending commitments for housing rose to a record high value in the December quarter 2021 while days on market fell and sales transaction volumes increased,” she said.

“Record low interest rates and strong demand have continued to support growth in property price.”

ABS Residential Property Index (December Quarter 2021)
State	Average Price ($)	Capital City	Annual Growth (%)
NSW	1.21m	Sydney	26.7
Vic	956,100	Melbourne	20.0
Qld	749,100	Brisbane	27.8
SA	614,300	Adelaide	23.9
WA	614,300	Perth	15.7
Tas	649,200	Hobart	29.8
NT	489,000	Darwin	13.0
ACT	979,600	Canberra	28.8
Australia	920,000	Australia	23.7

Prices rising by a quarter

These findings are consistent with REIA’s Real Estate Market Facts report, which showed a 25.1% increase in house prices over the past year —the highest in two decades.

According to REIA, the average median house price across the eight capital cities ended the year sitting at $1.02m.

All capital cities reported gains over the last three months of 2021, except for Darwin.

Sydney reported the highest quarterly median price at $1.6m, around 57% higher than the national average.

Meanwhile, Perth remained the most affordable, with a median house price at $525,000, which was 48.6% lower than the national figure.

REIA president Hayden Groves said one trend witnessed over the past year was the rise in investor activity, particularly in the regional markets of Wollongong, Launceston, Sunshine Coast, and Mt Gambier.

“Household investor finance increased by 13.4% in the December quarter, with investors continuing to enter the market confidently in this phase of the pandemic,” he said.

—

Photo by @tomrumble on Unsplash