The robust growth in house prices shows no sign of slowing down, with the latest data from CoreLogic showing dwelling values are rising at the fastest rate in 32 years. According to CoreLogic, national house prices rose at 2.8% in March, the most significant increase we’ve seen since October 1988. In March, all capital cities saw strong growth, led by Sydney with a solid 3.7% increase in dwelling values. While the weakest capital city was Adelaide, which still saw 1.5% growth. Regional Australia also continues to perform strongly, increasing in value by 2.5%.
The last time house prices rose this quickly in Sydney was in the previous boom in 2015, before the credit tightening policies introduced by APRA. In March, the total result means that Sydney and Melbourne have fully recovered from the slight COVID-induced downturn in mid-2020. Sydney prices are now back above their 2017 highs by 2.6% and have fully recovered from the -14.9% fall we saw after the last boom. Similarly, Melbourne house prices are also fully recovered and are also back at record high levels.
We are also starting to see the larger capital cities overtake the smaller capitals that had previously seen solid growth. The first quarter also closed with substantial gains across the board, with dwelling values up by 5.8% nationally. In terms of the units vs. houses, there is still clearly more robust demand for lower-density property as homes increased by twice as much as units over the first quarter. At the same time, it is still the upper end of the market that is producing the bulk of the gains. In March, the upper quartile of homes increased in value by 3.7% March, outpacing the lower quartile that showed a 1.6% increase.