The Australian residential realty sector posted another impressive record in April, albeit at a slower pace. Affordability became an issue for many prospective home buyers as high-end properties remained out of their reach.
March had seen home prices gain an all-time high of 2.8%. Property consultant, CoreLogic, released data that revealed that the March returns were the highest in 32 years. April registered a lower 1.8% growth, which is impressive given the current pandemic situation.
Major cities witnessed comparatively higher spikes to regional municipalities. Prices were up by 8.6% in first four months of the year. In April, Sydney prices shot up by 2.4%, Brisbane 1.7%, Melbourne 1.3%, and Perth 0.8%.
The regional market was not far behind – registering a record 1.9% surge in April, contributing to an annual growth of 13%.
Australia showed a growth of 7.8% from last year, according to CoreLogic. The first three months to April also registered a 6.8% rise in comparison.
Impressive performance by the sector has boosted consumer confidence and provided an outlet for investment by cash-strapped clients. An estimated influx of AUS$ 258 billion saw home prices reach AUS$ 7.7 trillion in the December quarter, according to the Australian Bureau of Statistics.
The Reserve Bank of Australia is also bank-rolling this development, repeatedly assuring buyers that borrowing rates would remain at a historic low of 0.1% until 2024. This move is likely to persuade the public to invest in new homes.
CoreLogic’s Research Director, Tim Lawless, however cautioned against wild speculation, saying that the sector’s meteoric rise could settle down to slower rates as affordability issues and inventory levels rise.
“With housing prices rising faster than incomes, its likely price sensitive sectors of the market, such as first home buyers and lower income households, are finding it harder to save for a deposit and transactional costs,” he added.