Home values in an Australian city have risen astronomically in the past few months as the increasing cash rate continues to have little influence on the house price rebound.
In NSW’s capital Sydney, house prices have rocketed upwards by 4.5 per cent since hitting rock bottom in November last year.
According to the PropTrack Home Price Index, the increase implied a rise in median home values of $45k, or $1470 per week since late last year.
In the past three months prices were up 2.7 per cent, representing an increase in median home values of $27k, or $2100 per week.
“Greater Sydney saw the fastest growth in home prices of any capital city over June. This marked the sixth consecutive month of price rises for Australia’s most expensive capital city. Sydney has now recouped much of the losses recorded over 2022,” PropTrack economist Anne Flaherty told news.com.au.
Ongoing property price growth acceleration in Sydney despite climbing interest rates pointed towards a significant imbalance between supply and demand, she said.
Sydney house prices have been climbing more than $2000 every week. Picture: NCA Newswire/Gaye Gerard
“The total number of properties listed for sale in Greater Sydney remains subdued and, in May, was a staggering 18 per cent lower compared to the same time last year.
“Fewer listings are contributing to more competitive market conditions which is seeing prices rise, despite higher interest rates.”
Prices were expected to continue climbing along with the population growth and a slowdown in how fast homes were being built.
“What’s more, the speed at which new homes are being built is slowing, with development approvals and construction starts slowing,” Ms Flaherty said.
“This is expected to exacerbate the issue of undersupply over the coming years which could drive prices even higher.”
Some of Sydney’s formerly more affordable suburbs have also skyrocketed in recent months.
“Price growth over June was strongest in the relatively more affordable outer suburbs, with the Blacktown, North Sydney and Hornsby, and Parramatta regions recording the strongest price growth,” she said.
Meanwhile, a handful of regions out the city’s outskirts had dropped in price.
A significant imbalance with supply and demand was to blame. Picture: NCA Newswire/Gaye Gerard
“In contrast, some regional areas are continuing to see declines, including the Southern Highlands and Shoalhaven, the Mid North Coast, and the Hunter Valley,” she said.
Every capital city except Darwin recorded increases in the latest PropTrack Home Price Index release on June 1, following prices accelerating and broadening in May.
Canberra and Hobart joined the rebound as their recent falls reversed and all regional markets saw prices rise in May except regional NSW and regional Victoria.
Canberra and Perth recorded the largest increases in May. Sydney, the market which led the downturn, has also led the recovery, with prices up 3.03 per cent in May from a November low and now down less than 2 per cent from levels seen in the same period last year.
Home price growth has been stronger in the capital cities than regional areas this year. This trend continued in May, with regional areas lifting a small 0.03 per cent and capital city prices lifting 0.45 per cent.
Regional markets have however outperformed on an annual basis.
Source : News.com.au