We blinked and it was February! The first month of 2021 was not the only thing that zoomed by, with Australian house values climbing to their highest level on record this week, according to the latest CoreLogic home value report.
Over the first month of 2021, CoreLogic’s national value index recorded a 0.9 per cent increase over the month, taking Australian home values to a new record high, blazing by pre-COVID levels by 1.0 per cent to finally sit at 0.7 per cent higher than the previous peak back in September 2017.
Following on from the seasonal slowdown over the holiday period, auction activity has also started to ramp up - with preliminary auction rates across the capital cities recording a weighted average of 81.1 per cent across 891 auctions.
At Upside, we saw RECORD average inspection numbers at our open homes in January more than in any other month since launch - rising 86 per cent compared to the same time last year!
Tree-change trends continue...
While every capital city in the country experienced an increase, regional house values amplified the trends we saw at the end of 2020, and rose at more than twice the pace of the capital city markets! Home values across Regional Vic and Regional NSW s rose 1.6 per cent and 1.5 per cent respectively in January compared with a 0.4 per cent increase in home values across Melbourne and Sydney.
According to CoreLogic’s research director, Tim Lawless, “Internal migration data shows more people are leaving Sydney and Melbourne for regional areas, resulting in a transition of activity from the metro regions to the outer fringe and regional markets. This demographic trend is further compounded by the demand shock of stalled overseas migration.”
Better housing affordability, an opportunity for a lifestyle upgrade and lower density housing options are other factors that might be contributing to this trend, along with the new found popularity of remote working arrangements.”
We are now in a seller's market
The rise in house values is happening against the backdrop of historically low listings currently available on the market - and if the buyer activity we’ve been seeing on the ground is anything to go by, it’s the perfect storm for home owners to capitalise on if you are thinking of selling this year.
2021 kicked off with a tight hold on new listings available on the market, with the number of fresh new homes on the market down 3.3 per cent lower than the same time last year - and a whopping 13.3 per cent below the five year average.
Another factor impacting available housing supply has been a strong rate of absorption from rising home buyer activity, especially in the detached housing space. CoreLogic estimates the number of national home sales over the past three months was 23.9 per cent higher than the equivalent three month period from a year ago.
The volume of regional home sales was estimated to be 26.8 per cent higher than a year ago while capital city sales were up 22.1 per cent.
“With housing activity continuing to rise at above average levels while listing numbers remain well below average, the natural consequence is upwards pressure on housing prices,” Mr Lawless said.
Advertised supply levels are low while demand is strong. This is a seller’s market, but for some reason we are still seeing below normal vendor numbers across most markets. With sentiment rising and selling conditions favouring the vendor, it is reasonable to expect new listing numbers will rise as the year progresses which may help to temper housing market conditions.”
While agent activity is ramping up...
Real estate agent activity across CoreLogic’s RP Data platform is up 6.5% over the first 28 days of January compared with the same period in 2020.
“A lift in real estate agent activity typically leads to a rise in new listing numbers with a lag of a few weeks. We are expecting to see new advertised stock levels rising substantially though early February, well above last year’s levels,” Mr Lawless said.
...So is buyer demand
As the real estate industry kicks into overdrive, so too has buyer activity, with the number of mortgage related valuations already 27% higher than a year ago across CoreLogic’s Valex valuation platform.
“At the moment, despite our expectation of a lift in new listing numbers, buyer demand is still outpacing new stock additions. If this trend persists, the rapid rate of absorption is likely to keep overall stock levels low resulting in further upwards pressure on housing prices,” said Mr Lawless.
According to REA Insights Weekly Buyer Demand Report, the amount of serious buyers in the market is up 40.8 per cent compared to this time last year.
Annual figures reveals that demand is up in almost every state and territory, but it’s the ACT and Victoria that have recorded the highest increases.
Is 2021 your year to sell?
With the near historic-high levels of demand, properties are selling quickly. If you’re looking to sell in 2021, it is the perfect time to speak to your local Upside agent to find out if your property has also experienced an increase in value.