Australian housing market update: August 2021
Although the pace of housing growth has slowed, values continue to rise at a rate that is well above average across most areas of the country.
Australian housing values increased a further 1.6% last month, taking home prices 14.1% higher over the first seven months of the year and 16.1% higher over the past twelve months.
The annual change in national housing values is the fastest pace of annual growth since February 2004. However, in a sign the housing market is losing some steam, the monthly growth rate has been trending lower since March this year when the national index rose 2.8%.
The gradual easing in the rate of housing value growth can probably be attributed to a combination of affordability factors and less stimulus. With dwelling values rising more in a month than incomes are rising in a year, housing is moving out of reach for many members of the community. Along with declining home affordability, much of the earlier COVID related fiscal support, particularly fiscal support related to housing, has expired.
On the flip side, demand is being stoked by record low mortgage rates and the prospect that interest rates will remain low for an extended period of time. The number of home sales is tracking approximately 40% above the five-year average while active listings remain about -26% below the five-year average. The mismatch between demand and advertised supply remains a key factor placing upwards pressure on housing prices.
Although the pace of growth has slowed, housing values continue to rise at a rate that is well above average across most areas of the country.
Find out the latest news for each state by clicking the link and watching the videos below or read the full Housing Market Update August 2021 Transcript.