Housing values in Australia’s capital cities could soon make a full recovery following the downturn. In fact, the average value of property in Melbourne, the quickest market to recover, could reach a record high by January 2020 if it continues to increase at its current rate.
Sydney isn’t far behind, and most other capital cities are showing positive signs. Could Australia be on the cusp of another property boom?
AVERAGE PRICE GROWTH STRONG THROUGHOUT CAPITAL CITIES
In October, property values in every capital city but Perth Increased. Just like before the downturn, Melbourne and Sydney were the fastest growing, with their average values increasing by 2.3% and 1.7%, respectively during the month.
Other capital cities have been more measured in their growth, but they are still growing – all except for Perth and Darwin have seen an average price increase during the three months to October. This has driven the national average housing value up by 2.9 per cent during the same period.
CoreLogic’s Research Director Tim Lawless identified the drivers behind Melbourne and Sydney’s recent impressive growth, stating that they include tighter labour conditions, strong population growth and record low interest rates.
IS THIS ANOTHER HOUSING BOOM?
This may not be the next housing boom but it’s certainly a recovery at this stage. If dwelling values increase continue at the rate they have over the last three months (around 1% per month), the national average housing value could be above boom levels within the next six months.
Hobart’s average asking price has already reached a record high in October, while Canberra’s peaked in September. Melbourne’s average property value could reach a record high within three months, Brisbane’s could take four months and Sydney’s may take six if growth continues at the current rate. Adelaide will recover more slowly, but the city’s market is nonetheless showing signs of growth.
This recovery could provide a shot in the arm to the Australian economy by boosting household wealth and spending and improving consumer confidence. On the other hand, if this rate of growth continues, high prices will continue to make buying difficult for first home buyers after a brief respite during the downturn.
IS NOW A GOOD TIME TO BUY?
It’s always best to buy property when you’re ready, rather than trying to time the market. With that said, current trends suggest that property values are headed upwards in most capital cities nationwide. If you buy well now, you may enjoy considerable capital gains in the future, particularly in Sydney and Melbourne.
If you are going to buy, start your search here on Australia’s newest and fastest growing online property listing site – Homes.com.au.