Australia home prices end rocky 2020 on recovery track

Analysts are expecting more gains this year as buyers outnumber sellers.
Analysts are expecting more gains this year as buyers outnumber sellers.PHOTO: BLOOMBERG

SYDNEY (REUTERS) - Australian home prices climbed for a third straight month in December as 2020 ended on a strong note across major cities and regional markets, with analysts expecting more gains this year as buyers outnumber sellers.

The turnaround from the Covid-19-led crunch has provided a much-needed windfall to consumer wealth and confidence, with the country's housing stock already valued at A$7.2 trillion (S$7.33 trillion) by September.

Data from property consultant CoreLogic out on Monday (Jan 4) showed national home prices rose 1.0 per cent in December, from November when they added 0.8 per cent. Values were up 3.0 per cent on the previous December.

Prices across the major capitals rose 0.9 per cent in December from November, while the regional market surged 1.6 per cent as city dwellers smarting from coronavirus lockdowns sought more living space and houses with gardens.

Sydney managed a gain of 0.7 per cent, while Melbourne increased 1.0 per cent. Brisbane, Perth and Adelaide all rose 1.1 per cent in the month. Values for the combined capitals were 2.0 per cent higher for the year, while regional prices jumped 6.9 per cent

"As remote working opportunities became more prevalent and demand for lifestyle properties and lower density housing became more popular, regional areas saw housing market conditions surge," said CoreLogic's head of research, Tim Lawless.

The gains have been concentrated in houses, with the apartment sector hit by a glut of new supply and a fall off in demand amid restrictions on international tourism and migration.

While home sales recovered strongly in the last few months, listings remained below average.

"Low advertised stock levels reflect a rapid rate of absorption; put simply there are more active buyers than new listings being added to the market," said Lawless.

"With home buyers outnumbering sellers, most areas around the country represent a seller's market."