Australia’s residential housing market has experienced “a year like no other” as it carries over the remarkable momentum it had from 2020 but with the additional support from economic stimulus, according to CoreLogic’s annual Best of the Best Report.
The report showed that real estate went from $7.2 trillion at the end of November 2020 to a record high of $9.4 trillion in just 12 months. Sales volume also climbed to its highest level in nearly two decades.
According to Eliza Owen, head of research at CoreLogic, this unprecedented growth was driven by multiple factors, such as low interest rates, fiscal support for households, high household savings and low levels of advertised stock.
“Rates of housing turnover had also been relatively low for some years before these factors boosted housing demand, which may also explain the elevated volume of sales in the past 12 months,” Owen said. “November was 32.6% above the decade annual average.”
The forces behind this growth also lost some impact in the second half of 2021, but it picked back up as vendor activity surged with new listings – averaging 41,800 in the same period for the past five years.
Notably, remote work trends born out of extended lockdowns have led people to flock to regional Australia for a tree-change, outperforming high-end markets of Mornington Peninsula in Melbourne and Northern Beaches in Sydney in the top value growth tables of CoreLogic’s report.
“The quiet coastal suburb of Yamba, in the Coffs Harbour-Grafton region of NSW, achieved the highest annual growth in units of suburbs at 56.6%. [Other top growths] include Ocean Grove units in Geelong, Fraser Island units in Wide Bay and Campbell Town houses in Tasmania,” Owen said.
“However, this phenomenon may also just reflect market dynamics that have been observed in the
housing market cycle over about a decade, where more expensive markets – particularly in Sydney and Melbourne – tend to show more volatility. This means during the upswing phase of the housing market cycle, expensive property markets in these cities will generally see higher growth rates.”
Meanwhile, units dominated the list of most expensive sales, including three unit sales over $40 million each in the new Barangaroo tower in Sydney.
Entering 2022, Owen said to expect a softer growth as sales and listing activities have likely peaked.
“The constraints of slightly tighter credit conditions, the erosion of housing affordability and a higher
level of listings being added to the market are expected … in 2022,” Owen said. “These forces are an accumulation of headwinds for property market performance. Softer growth rates are likely to coincide with fewer purchases, where sales and listings activity eventually move with momentum in price.”
These properties make up the Best of the Best in 2021 in the 12 months to Nov. 30:
