Australian home prices boasted a bumper 2021 as rock-bottom interest rates drove values sky-high, with values in Sydney alone rising an average of A$4,200 every single week.
Figures from property consultant CoreLogic out on Tuesday did show some heat 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.
Prices were up 22% for the year, with a 26% jump in the regions outpacing a 21% increase for the state capitals amid a shift toward country living.
Sydney added only 0.3% in December, although that still brought its gains for the year to 25% and produced a median home value of almost A$1.1 million ($790,460).
Melbourne saw a rare dip of 0.1% in December, but Brisbane surged 2.9% and Adelaide 2.6%.
Windfall for Households
The boom has been a windfall for household wallets and consumer confidence. The Australian Bureau of Statistics estimates the value of the housing stock surged by a trillion dollars in the six months to September to reach A$9.3 trillion.
The red-hot market finally tempted out sellers in Sydney and Melbourne where listings rose sharply late in the year, contributing to the slowdown in the market.
Still, CoreLogic’s research director, Tim Lawless, noted home sales for all of 2021 were around 40% above the decade average at a record 653,000, pointing to strong demand.
“Such a significant mismatch between available housing supply and the level of demand is a fundamental reason why housing prices have risen so sharply,” Lawless said.
“As stock levels normalise and affordability constraints along with tighter credit conditions drag down demand, it’s reasonable to expect growth conditions will be more subdued in 2022.”
- Reuters with additional editing by Jim Pollard