World News – AU – House prices rise in November in every capital city

House prices rose in every capital city in November as the reserve bank cut interest rates to post lows and restrictions to contain the second wave of coronavirus outbreaks began to be lifted.

National property prices rose by 0. 8 percent last month, CoreLogic data, released Tuesday morning, shows the second straight month of a nationwide rebound. Every city saw a rebound in house values ​​in October, with the exception of Melbourne, as the Victorian capital struggled to slow the spread of the virus.

Major restrictions in Melbourne were lifted from early November and property prices in the area rose by 0. 7 percent in the same period, albeit around 0. 4 percent in the quarter. House prices in Sydney rose by 0. 4 percent with quarterly growth of 0. 3 percent.

While overall prices remain below March levels, most cities could see a full recovery on current course by February 2021. Melbourne is down 5 percent from its peak and will last longer, said CoreLogic research director Tim Lawless.

Housing prices have risen faster than apartments, but Melbourne housing units have been robust so far despite the high number of new urban developments in the city center in recent years and tenants battling the pandemic. House prices in Melbourne rose by 0. 7 percent in November, but there was a 0. 7 percent decline in Sydney. House prices increased by 0. 6 percent and 0. 9 percent for these capitals.

« We suspect that if the overseas migration doesn’t turn around earlier than expected, the stronger trend in numbers in Melbourne versus homes may be short-lived, which would help support rental demand « said Lawless. « This trend towards stronger conditions in the freestanding housing markets can be seen in most capital cities. « 

As affordable homes fuel the recovery, CoreLogic found signs of a resurgence among the 25 percent most expensive homes in Sydney. Melbourne has started to show a similar improvement, but the bottom 25 percent of the market is still outperforming the highest priced homes.

The top performing capitals for house prices in November were Darwin and Canberra, both up 1. 9 percent each. Property prices in Brisbane, Adelaide, Hobart and Canberra have now reached record highs.

Real estate values ​​in the capital rose by 0. A total of 7 percent, however, was surpassed by regional Australia, where prices rose by 1. 4 percent a month.

The Reserve Bank cut interest rates to a record low of 0. 1 percent in November from 0. 25 percent to boost economic growth after the coronavirus-triggered recession. Another boost for the real estate and residential construction sector is the Federal Government’s HomeBuilder grant of 25. $ 000 for newly built homes and major renovations. The grant was increased at a lower rate of 15 on Sunday for the first three months of 2021. $ 000 extended and more flexibility in terms of price caps and construction schedules. The Morrison government estimates this would be an additional 15. 000 house builds, bringing the total to 42. 000 corresponds.

Tenants across the country are facing a mixed situation, with rents for apartments in Sydney and Melbourne falling sharply between March and November. Units are now 6. 6 percent cheaper to rent in Sydney and 7. 6 percent less in Melbourne. Homes were less affected during the crisis.

At the height of the pandemic, banking economists saw double-digit price declines in Melbourne and Sydney over the next two years. Since then, the worst-case scenario for unemployment and the spread of the virus has not materialized, and tens of thousands of homeowners who have taken mortgage vacation have resumed repaying their loans.

NAB’s chief economist, Alan Oster, has now revised his forecasts and expects an increase of 5 percent in 2021 and 6 percent in 2022.

« We anticipate that lower interest rates over a longer period of time will be a major support for the property market over the next few years as prices rise across the country, » he said.

Jennifer Duke is a business correspondent for The Sydney Morning Herald and The Age at Parliament House in Canberra.

Real Estate Price Index, Housing, CoreLogic