House price surge slows but not from COVID-19

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House prices are still surging as the temperatures plummet but things could be cooling down in the market as well as the thermometer and it has little to do with recent lockdowns.

The latest CoreLogic monthly home price index rose by 1.9 per cent in June, with Sydney and Hobart the best performers.

For the 2020-21 financial year the index jumped by 13.5 per cent, which is the best result since 2004.

House prices were by far the better performer over units, recording 15.6 per cent growth compared to 6.8 per cent growth respectively.

CoreLogic head of research Eliza Owen said strong demand, an improving economy, low interest rates and low supply were the driving forces of the surging prices.

“The latest listings count from CoreLogic indicates that in the 28 days to June 27, total advertised stock remained 24.4 per cent below the five-year average,” she told ABC.

“This dynamic of strong consumer demand, and low housing supply, continues to create some urgency among buyers.”

Ms Owen said, however, that the June quarter had seen a cooling in the market.

“This easing in the pace of growth at the top end of the market is another clear sign of a shift in momentum,” she said.

“The rest of the market tends to follow movements at the high end, and this is the first time in nine months that the high-tier growth rate has not accelerated.”

Despite the recent COVID outbreaks and lockdowns around the country, Ms Owen told the ABC she does not think they will have much impact on price growth.

“Throughout lockdowns in the past 15 months, basically what CoreLogic data has shown is that you get a drop off in demand, you get a drop off in sales, but you also get a drop off in supply, because people know it’s not an ideal time to sell,” she said.

“So generally we see lower volumes, and because of that drop in demand and supply, the net effect on prices really isn’t much at all, especially when it comes to circuit breaker lockdowns.”


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