Even during the lockdown, housing prices in Sydney continued to rise.
CoreLogic’s latest hedonic home value index shows that based on the sales of units, detached houses and townhouses, the average real estate price has risen by 2% from July, or about US$20,000.
At the end of July, the typical value of a Sydney house was 1.017 million yuan, 18.2% higher than last year.
CoreLogic research director Tim Lawless said that record low interest rates and the prospect that they will remain low for a long time have stimulated demand from buyers.
Mr. Lawless said there is also a mismatch between buyer demand and the supply of properties available for sale.
CoreLogic pointed out that since June 27, the number of new listings in the Sydney area has fallen by 30%, and the total number of active listings is nearly 14% below the five-year average.
“Because buyer demand is so strong and active listings are much lower than average, potential buyers may feel a sense of urgency due to fierce market competition,” Mr Lawless said.
He added that these conditions have been observed in the early blockade and have decreased as the restrictions are lifted.
Mr. Lawless further pointed out that house prices rose by 2% in July. Although it was high by historical standards, it was far lower than the 3.7% increase in March.
He said that he expects the pace of price increases to continue to slow down throughout 2021.
He said: “Because the increase in residential value in one month exceeds the increase in income in a year, housing is becoming out of reach for many community members.”
“To some extent, Sydney is the capital city with the most expensive housing prices, and it is also the city with the largest housing price increase in the first seven months of this year.
“Deteriorating affordability may be a key factor in the economic slowdown here, and as the city goes through an extended lockdown period, the negative impact on consumer confidence is also true.”
Another factor that may help cool the market is the lack of most of the early financial support for Covid-19-especially housing-related financial support.
The price increase in July was greater than the unit price increase. The value of detached houses rose 2.1%, while the value of units rose 1.6%.
The median house price in Sydney is A$1.26 million, which is A$312,000 higher on average than Melbourne. House prices in Adelaide, Perth, Darwin and Brisbane are nearly twice as high.
The median unit in Sydney is US$810,000, which is more expensive than a single house in every capital except Melbourne and Canberra.