The real estate market continues to perform strongly half way into the spring selling season. Even a wet winter and an east coast lockdown didn’t slow down the selling pace. Vendors are taking advantage of the strong selling environment, with listings up significantly. Purchasers are also acting fast, snapping up homes in record time.
Here are some of the highlights for October 2021.
House values soar
National home values rose an incredible 20.3% in the 12 months to September 2021. That’s the highest growth rate recorded in since June 1989, over 32 years ago.
In the September quarter, national home values rose 4.8%. This was a slight easing from the June quarter, which saw an increase of 6.1%. The most recent quarter also occurred during the Delta surge, with the majority of NSW, Victoria and the ACT in lockdown conditions.
Our appetite for real estate is even higher at the top end of the market. In the September quarter, property valued in the top 25% rose 5.7%, as compared to a 2.6% rise across the lowest 25%.
This pattern held for every capital city, with the exceptions of Hobart and Darwin.
Regional property outperforms the capitals
Property values in regional Australia have risen 23.1% in the past 12 months, as compared to 19.5% across the combined capitals. In the September quarter, combined regional prices rose 5.1%, and combined capitals rose 4.7%.
The highest regional price rises were seen in NSW (26.7%) and Tasmania (27.2%). Queensland came in third with a regional price rise of 22.2%.
Every state recorded double digit rises in both the regions and capitals.
Property is selling faster
Not only are properties fetching higher prices than ever before: they’re also selling faster. In the three months to September, Australian properties took an average of 30 days to sell. One year earlier, the average was 42 days.
Unsurprisingly, given the very high demand for real estate, vendor discounting remains extremely tight nationally. Discounting has dropped to -2.9% in the September quarter, as compared with -3.6% in the same quarter in 2020.
These strong results are the more notable because they don’t arise from a supply shortage. In fact, sales volumes rose 41.9% in the 12 months to September, and transaction volumes in September 2021 were 25.5% above the five-year average. Despite higher numbers of homes on the market, demand has kept pace.
What’s next for real estate?
The real estate market is heating up again in time for summer.
New listings have trended higher in September, both due to better weather and the easing of distancing restrictions. Auction clearance rates have also recovered strongly as Melbourne and Sydney emerge from lockdown. In September, the average final clearance rate across the combined capitals was 74.3%.
However, overall listings are still -27.4% lower than average. That’s a function of the speed with which sellers are snapping up new property. Less time on the market translates to fewer listings overall.
What this means for sellers
Taken all together, the signs for sellers could not be more positive. Prices are trending ever-higher and buyers are highly motivated to purchase. Properties are coming off the market very fast, so you’ll be competing with fewer properties if you decide to list.
Even if you’re not sure that you’re ready to sell, now is a great time to consider getting an appraisal. Knowing what your home is worth can help you decide if you’re ready to upsize or downsize, or utilise the equity to buy an investment property.