Sydney Jan 4 (BUS) : Australian house prices boasted a glut in 2021 as low interest rates drove values to highs, with values in Sydney alone rising by an average of A$4,200 each week.
Figures from real estate consultancy CoreLogic released Tuesday showed some heat is leaving the market as national home prices rose 1.0% in December, compared to 1.3% in November and a peak of 2.8% early in the year, Reuters reported.
Prices are up 22% for the year, with a 26% jump in regions outpacing a 21% increase for state capitals amid a shift toward rural life.
Sydney added just 0.3% in December, although that continued to lift its gain for the year to 25% and generated a median home value of A$1.1 million ($790,460).
Melbourne saw a rare 0.1% decline in December, but Brisbane rose 2.9% and Adelaide 2.6%.
The boom was a windfall for household wallets and consumer confidence. The Australian Bureau of Statistics estimates that the value of the housing stock rose by a trillion dollars in the six months to September to reach 9.3 trillion Australian dollars.
The frenetic market finally enticed sellers in Sydney and Melbourne as listings rose sharply late in the year, contributing to the slowdown in the market.
However, CoreLogic’s director of research, Tim Lawless, noted that home sales for 2021 were nearly 40% above the decade average at a record 653,000, indicating strong demand.
“The huge mismatch between the supply of available housing and the level of demand is a fundamental reason for the sharp rise in housing prices,” Lawless said.
“As inventory levels are normalizing, and affordability constraints combined with tighter credit conditions are depressing demand, it is reasonable to expect growth conditions to be more subdued in 2022.”
MI