The estimated value of Australia’s residential real estate reached a record high of $9.4 trillion in November last year, up from $7.2 trillion just 12 months earlier.
According to CoreLogic, 2021 was an unprecedented year of growth for Australia’s housing market and produced a litany of outstanding results due to the extraordinary momentum carried over from 2020, coupled with monetary and fiscal stimulus measures.
*CoreLogic’s figures didn’t include the sale of 47 Lansell Road, Toorak, which reportedly sold at the upper end of its advertised $40 million to $44 million price guide in October last year.
Home sales volumes climbed to an estimated 614,635 over the past 12 months, the highest level in almost 18 years.
Dwelling values nationally also increased 22.2% over the 12 months to November, the highest increase since 1989.
2021 in review
“Strong housing market performance over the year was driven by multiple factors, including low interest rates, fiscal and institutional support for households, high household savings and relatively low levels of advertised stock,” said CoreLogic Head of Research Eliza Owen.
“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, which at November was 32.6% above the decade annual average.”
CoreLogic found that house values rose 24.6% over the year to November 2021, outperforming the 14.2% increase in national unit values.
Regional dwelling values gained 25.2% over the 12-month period, surpassing the combined capital cities uplift of 21.3%.
“The popularity of regional Australia is reflected in many aspects of the Best of the Best report for 2021,” Owen said.
“The quiet coastal suburb of Yamba, in the Coffs Harbour-Grafton region of NSW, achieved the highest annual growth in units of suburbs across Australia, at 56.6%.
“Regional suburbs were represented in many of the top value growth tables, including Ocean Grove units in Geelong (up 41.7% in the year), Fraser Island units in Wide Bay (up 48.2%), and Campbell Town houses in Tasmania (up 50.5%).”
Increased internal movements from cities to regions bolstered property values in higher-end lifestyle markets such as the Mornington Peninsula in Melbourne, the Northern Beaches in Sydney and the Gold and Sunshine coasts in southeast Queensland.
“This may in part be attributable to how COVID-19 continued to shape demand trends, with coastal or leafy settings being more desirable as some workers were empowered to work remotely,” 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.”
Looking ahead, Corelogic predicts that Australia’s property market may have seen the peak of value increases as worsening affordability constraints, a surge in vendor activity and a recent tightening of housing finance conditions take effect.
“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 to see softer growth rates across property values 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.”