The Domain House Price Report for the March 2021 quarter has revealed that nationally, house prices reached a new record high over the March quarter of $899,509 across the capital cities.
House prices posted a quarterly gain of 5.7 per cent, which is the steepest rise in almost 18 years, with all capital cities seeing growth, the report said.
According to Domain, this is the first time that house prices have risen simultaneously for two consecutive quarters since 2009 after the global financial crisis (GFC).
Nationally, units have recovered from the 8 per cent drop in prices from mid-2017 to early 2019, as well as the 2.1 per cent decline in mid-2020, due to the coronavirus pandemic.
Unit prices have beaten the previous price peak reached mid-2017, at $584,340.
Sydney house prices have spiked to a new record of $1,309,195 after jumping $103,000 over the March quarter or 8.3 per cent, representing the fastest quarterly acceleration of house prices since Domain records began in 2013.
The report attributed the growth to owner-occupiers, who have been buoyed by low home loan rates, government incentives such as the HomeBuilder scheme, and high household savings.
In Melbourne, both house and unit prices reached another new record over the first quarter of 2021, with house prices rising faster in Melbourne than regional Victoria for the first time in one year.
House prices rose by $45,000 – or 4.8 per cent – over the March quarter to $974,397, which represents a 7.3 per cent annual increase.
Domain attributed the growth in Melbourne to record-low interest rates, reduced discretionary spending, and state and federal housing incentives.
Greater Brisbane house prices are at a new record high at $632,999, with house prices rising by 1.7 per cent over the March quarter. This is 6.2 per cent higher than the same time last year.
Adelaide house prices are also at a new record high at $599,706, rising 3.7 per cent over the March quarter, while the city has seen the highest annual gain since mid-2010 at 10.4 per cent.
The Domain report said the flow of new listings has not kept pace with buyer demand, creating competition in the market not seen in some time.
Hobart house prices have broken the $600,000 price range for the first time, with prices rising 7.6 per cent over the March quarter to $601,567, marking the largest quarterly jump since 2017.
Canberra’s house prices surged by 9.7 per cent to $927,577 over the March quarter, marking the fastest rise in prices over a quarter since Domain records began in 1993. This has also marked the first time the capital city has broken the $900,000 price range.
Darwin’s house prices jumped 9.1 per cent over the March quarter to $554,295, the steepest quarterly rise since 2009.
The performance of Darwin’s market began improving mid-2020 after a multi-year downturn.
However, unit prices declined by 1.8 pr cent over the quarter to $293,731, but are 20.2 per cent higher than last year, a rate of growth not seen since 2009.
Perth’s housing market has transitioned into other price cycle and is around one year into a recovery following a five-year downturn, according to Domain.
House prices have now reached the highest point in just over five years at $578,612, while unit prices have reached the highest in almost three years at $371,445.
While house prices rose 2.4 per cent over the March quarter (the fourth consecutive quarter of growth), unit prices grew by 3.9 per cent (the third consecutive quarter of growth), according to the Domain data.
Commenting on the overall rise in national house prices, Domain senior research analyst Dr Nicola Powell said: “Record-low interest rates, improved household savings, low listing volumes, post-lockdown lifestyle changes, consumer sentiment roaring to an 11-year high, returning cashed-up expats and government incentives have fuelled demand for housing and a strong market performance.
“It is the first time in a year that price growth across the combined capital cities has outperformed regional areas.”
[Related: Victoria leads on loan commitments: CommSec]
Malavika Santhebennur is the features editor on the mortgages titles at Momentum Media.
Before joining the team in 2019, Malavika held roles with Money Management and Benchmark Media. She has been writing about financial services for the past six years.