House prices running hot – growth highest since 1989
Queensland house prices were growing at a rate of about 20 per cent a year and first home owners were increasingly opting to buy and rent to enter the market.
The falls in house prices appear to be abating. (ABC News: Eliza Laschon)
The Australia-wide annual growth rate is now at the fastest pace since 1989, but on a monthly basis it has started to slow.
The continued price hikes puts the median house price in Queensland at $625,000. At a 20 per cent deposit level people would need to have savings of $125,000 to buy a relatively modest house.
And CoreLogic believes that while growth conditions were still positive, “it is becoming increasingly clear the housing market moved past its peak rate of growth in March when national dwelling values increased by 2.8 per cent”.
“Since that time, the monthly rate of growth has eased back to 1.5 per cent (nationally),” CoreLogic’s Tim Lawless said.
“With housing values rising substantially faster than household incomes, raising a deposit has become more challenging for most cohorts in the market, especially first home buyers.”
In Sydney, a median value house is now $1.3 million meaning a deposit of $262,000.
Lawless said affordability was probably the issue behind the slowing monthly rate, especially for first home buyers.
He said over the January to July period the number of first home buyers taking out an investment loan increased by a staggering 45 per cent.
Although this was off a low base, Lawless said it suggested they were choosing to buy and rent the property as a way of getting their foot in the door, a method known as “rent vesting”.
Westpac senior economist Matthew Hassan said the despite Covid, most markets were “uniformly upbeat”.
“The picture continues to be of a very mild delta shock even in the most exposed capital city markets,” Hassan said.
Brisbane prices were up 1.8 per cent for the month, 5.9 per cent for the quarter and 19.9 per cent for the past 12 months. Regional Queensland had a monthly increase of 1.7 per cent and was one of the better regional markets.