- The Australian property prices have roared another 1.8% higher in April.
- It comes off the back of an even stronger first three months, with CoreLogic director of research Tim Lawless noting the “slowdown” came as property outpaced wage growth.
- “With housing prices rising faster than incomes, it’s likely price sensitive sectors of the market, such as first home buyers and lower income households, are finding it harder to save for a deposit and transactional costs,” he said.
- Visit Business Insider Australia’s homepage for more stories.
Australian property prices continue to grow but the market’s relentless march north seems like it is beginning to slow.
Prices jumped 1.8% in the month of April according to the latest data from research house CoreLogic. While it indicates that there is still plenty of momentum in the market, it does appear to be slowing, down from 2.8% growth in March which broke a 32-year record.
“The slowdown in housing value appreciation is unsurprising given the rapid rate of growth seen over the past six months, especially in the context of subdued wages growth,” CoreLogic research director Tim Lawless said.
“With housing prices rising faster than incomes, it’s likely price sensitive sectors of the market, such as first home buyers and lower income households, are finding it harder to save for a deposit and transactional costs.”
It comes hot on the heels of a record-breaking start to the year, as house prices in Sydney jumped by more than $100,000 in just three months, and a slew of capital cities set new highs.
While prices climbed 6.8% in the first few months of the year, some of the steam now seems to be coming out of the market as Australian buyers struggle to keep up. The latest ABS figures show lending has begun to contract after a long string of record-breaking months, falling 4% in February.
Still, there’s still clearly plenty of heat in markets around the country, as every city and regional market rises in tandem. Despite already being the country’s most expensive market, Sydney prices grew by around $22,000, or 2.4%.
While regional markets outperformed cities in the middle of the pandemic, they have since relinquished the lead to capitals. Smaller ones like Adelaide, Hobart, Darwin and Canberra have for months led the country, growing between 10% and 15% year on year.
Houses meanwhile continue to outsell apartments in capital cities, as prices of detached dwellings rose at 8.6% in the first four months of the year, or twice the rate of units.
“A preference shift away from higher density housing during a global pandemic is understandable, however a rise in flexible working arrangements also seems to be supporting greater demand for houses around the outer-fringes of capital cities,” Lawless said.
“Relatively weak investor activity, compounded by a supply overhang in some high-rise precincts, is also dampening price growth in unit markets.”
It speaks volumes that price growth of more than 1% per month can be described as “dampened” or that price growth under 2% marks a “slowdown”.
But that is the state of the Australian property market right now.