The median price of a house in Sydney skyrocketed by nearly $1,200 a day through the June quarter and the median Melbourne home now costs a record $1.02 million, Domain reports, outlining the market’s phenomenal growth through Australia’s stop-start economic recovery.
But recurring coronavirus outbreaks and lockdown restrictions could dampen the Sydney market through the coming months, and Westpac analysts expect macro-prudential tightening to eventually suppress prices in 2023.
In its new housing market report, released Thursday, Domain states the median Sydney house price grew 8.2% over the quarter, and a stunning 24% over the past year, reaching $1.41 million.
The top end of the market was not the star of Sydney’s housing show.
Propelled by the pandemic-fuelled desire for more space, lax lending conditions, and no small amount of FOMO, buyers led the Baulkham Hills, Hawkesbury, Sutherland, and Ryde regions to the highest levels of quarterly growth.
Median unit prices also rose over the same period by 3.2% to just north of $786,00, but Domain believes the daunting housing prices, plus mounting investor interest, could see those prices climb further through the year.
Housing price growth remained strong across the regions, to the benefit of homeowners in popular locales: the median house price in Byron has shot up 51% over the year to a cool $1.58 million.
Domain states Melbourne’s median house price has cracked the seven-figure mark for the first time, joining the Real Estate Institute of Victoria in declaring the market milestone.
Prices in the already-exclusionary inner east are hovering around their peak, Domain states, with continual demand linked to the pandemic-era demand for more space.
This same impulse was expressed in the unit market, which rose a comparatively paltry 0.8% over the quarter. Inner-city homes sit some $27,000 under their 2017 peaks, though this may reflect the lingering impact of lockdowns and border closures.
Brisbane median house prices reached their own record of $678,236 through the quarter. Its unit market, which dipped 0.4%, could rise in coming years, Domain says, in line with infrastructure developments linked to the 2032 Olympic Games.
Median housing prices in the nation’s capital grew 1.04% through the quarter, allowing Canberra to join Melbourne and Sydney in the million-dollar echelon.
House prices in Perth, Adelaide, Hobart, and Darwin grew 1%, 5.4%, 6.6%, and 8.9%, respectively.
Nationally, Domain states median house prices have grown 18.8% from this time last year.
The virus is expected to stymie some of Sydney’s auction action, Westpac said in a Wednesday update to its market projections.
“While prices have posted a solid gain in July, momentum already appears to have slowed somewhat with repeated ‘mini–lockdowns’ across several states and the more prolonged closure in NSW starting to impact activity,” the bank said.
Westpac anticipates activity will “rebound swiftly” once restrictions are lifted, lifting prices through to the year’s end.
That mammoth price growth cannot continue forever, with “price growth… expected to slow to 5% in 2022 with most of the increase occurring in the first half,” Westpac stated.
All of that lending will have an impact, the bank posited, saying “tightening in macro–prudential policy settings will
restrain the supply of credit.”
The bank suggests those policies, wild unaffordability, and rate rises will see prices pared back by 5% through 2023.
Until then, it’s happy days for those already secure in the housing market.