Australia’s white-hot housing market has seen massive value gains during the past 12 months as record low interest rates and an acute shortage of homes for sale fuelled a sales frenzy.
Thanks to the federal government’s HomeBuilder scheme, a huge volume of homes are currently under construction across Australia as buyers continue to opt for detached housing—which increased by 24.6 per cent in 2021, outperforming the 14.2 per cent lift in national unit values—helped along by the increasing adoption of hybrid home-office working policies.
House prices in regional markets have surged twice as fast as their capital city counterparts during the past year with big coastal centres close to capital cities attracting the most metro movers.
The pandemic has also provided a catalyst in kick-starting and accelerating build-to-rent supply as non-existent international arrivals and investors push many developers of traditional build-to-sell apartments towards the nascent sector that doesn’t have to deal with the retail sales processes and also boasts faster construction times.
While prices have risen at the fastest annual growth rate in 30 years, they have recently started to cool, with the big four banks, along with a number of the country’s top economists, tipping prices will peak towards the second half of 2022 as higher borrowing costs and fatigue sets in and weigh down buyer demand.