The latest national Home Value Index from CoreLogic showed a rise of 2.2 per cent in May, up on the 1.8 per cent growth recorded in April, but the newest rate of change lagged behind March’s record surge of 2.8 per cent.
Values were up by more than 1 per cent across every Australian capital city over May, with both house and unit values lifting.
Combined, capital cities saw a rise of 2.3 per cent in dwelling values, surpassing regional areas, which had 2 per cent growth.
In Sydney, dwelling values rose by 3 per cent in May, while the median property value was $970,355. Melbourne saw a more subdued increase of 1.8 per cent for the month, holding its median value of $740,562.
But Hobart had the greatest monthly leap of 3.2 per cent, with its median value being $574,543. Perth saw the slowest month out of the capital cities, with its 1.1 per cent increase.
In regional NSW, there had been a 2.5 per cent increase in house values, surpassing the growth rates for Victoria (1.7 per cent), Queensland (1.9 per cent), South Australia (0.1 per cent) and Tasmania (1.9 per cent). Regional Western Australia was the only area that copped a fall during May, slipping by 0.1 per cent.
CoreLogic research director Tim Lawless commented that improved economic conditions and low interest rates have continued to bolster consumer confidence, building consistently strong demand.
“At the same time, advertised supply remains well below average,” he said.
“This imbalance between demand and supply is continuing to create urgency among buyers, contributing to the upwards pressure on housing prices.”
But the underlying trends have also shifted over the past year.
“The most expensive end of the market is now driving the highest rate of price appreciation across most of the capital cities, whereas early in the growth cycle it was the most affordable end of the market that was the strongest,” Mr Lawless said.
“From a geographic perspective, it was the smaller capital cities that led the housing market out of the COVID slump, but now Sydney has risen through the ranks to record the largest capital gain over the past three months with values up 9.3 per cent.”
But the annual growth rate is generally higher across smaller capital cities, with Darwin cracking 20.3 per cent annual growth in May – the strongest yearly gain CoreLogic has recorded.
Hobart, Canberra and Adelaide also outpaced the NSW capital, with 20.3 per cent, 15.6 per cent and 11.8 per cent annual growth. Sydney saw 11.2 per cent increase in values over the 12 months to May.
Melbourne experienced the lowest annual growth of all the capital cities, at 5 per cent.
Housing values across regional NSW were up by 18.6 per cent for the year, while regional Tasmania increased by 18.1 per cent. Regional Queensland was up 14.6 per cent, Victoria grew by 13.1 per cent and South Australia increased by 12.4 per cent.
On the other hand, regional Western Australia saw no change in demand for the year.
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Sarah Simpkins is the news editor across Mortgage Business and The Adviser.
Previously, she reported on banking, financial services and wealth for InvestorDaily and ifa.