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Australia's Housing Market Hits Monthly High During Covid-19
Posted
March 1, 2021
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March 1, 2021
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1:57Now PlayingAustralia’s housing market is booming again, with the biggest monthly price gain in 17 years dispelling fears of a Covid-induced downturn.
Nationwide house values surged 2.1% in February, the largest increase since August 2003, CoreLogic Inc. data released Monday showed. Capital city prices gained 2%, led by Sydney and Melbourne.
“Australia’s housing market is in the midst of a broad-based boom,” said Tim Lawless, head of research at CoreLogic. The rapid gains have been “spurred on by a combination of record-low mortgage rates, improving economic conditions, government incentives and low advertised supply levels.”
While housing prices are surging from Singapore to Canada and the U.S., a return to boom times in Australia threatens to swell an already worrisome pile of household debt and make it harder for young people to get a foot on the property ladder. Sydney is the world’s third-least affordable housing market, and Melbourne the sixth, according to a report last week.
The nation’s property values have taken off again after the central bank slashed interest rates to a record low and said they’ll stay there for at least three years. People are also looking for larger houses with space to work from home, while the rapid price growth has rekindled a fear of missing out, sending buyers flocking to the market. That could see home prices surge 16% over the next two years, according to Commonwealth Bank of Australia, the nation’s largest mortgage lender.
“Auction clearance rates are sitting at levels consistent with double-digit dwelling price growth” said Gareth Aird, head of Australian economics at Commonwealth Bank. “History shows people like to buy into a rising market.”
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