House prices across Australia are rising at an annual pace that hasn’t been seen for more than 30 years, thanks to a combination of factors that have created significant demand and reduced supply.
It will be difficult to find a market where the value of housing has not increased during 2021, such as in the city center, in the suburbs around the city, or in rural towns.
But in many pockets, this rate of growth was so high that it was over $ 50,000 a month in the staggering 127 suburbs.
Mortgages have hit record highs in Australian Bureau of Statistics data, breaking records in all states and territories except Western Australia.
The average mortgage size for Australian homes reached a record high of $ 595,568 in November.
The supply of real estate for sale surged at the end of the year, with a new listing in the capital in November hitting a 10-year high.
Sales also increased as New South Wales and Victoria broke out of the blockade and both buyers and sellers were confident in listing and trading.
With all this in mind, it’s not surprising to see new mortgage commitments and average mortgage sizes increase, coupled with the extraordinary price increases seen across Australia.
The combination of factors led to an explosive increase in housing demand in 2021, resulting in a surge in prices.Photo: Getty
This lending boom contributed to the rapid rise in home prices, which meant that in 2021 there were 127 suburbs where home prices rose by more than $ 50,000 each month.
And across Australia, home prices have risen by more than $ 500,000 in 178 suburbs and more than $ 200,000 in year-end values in 832 suburbs over the past 12 months.
Larger homes, larger block sizes, and the desire to be closer to the beach and waterfront were key features of the 2021 demand trend.
The main driving force behind the surge in buyer activity was the ongoing reassessment of housing needs.
Lifestyle properties are a higher priority than ever before, with many seeking larger homes and spaces in suburban and rural areas, and beachside properties in coastal areas.
Space and lifestyle are becoming more and more important considerations as we spend more time at home and work remotely.
Prestige Properties had an outstanding year in 2021.Photo: Getty
The Australian housing market celebrated its remarkable year in 2021, and luxury real estate was no exception. Although vacations abroad were off limits, the money saved provided some people with the opportunity to invest in luxury real estate.
Price increases have maintained a pace that triples the number of Australian suburbs with a median of over $ 3 million. And that’s after it has already doubled in the previous year.
This stands out across the suburbs, where the dollar value of homes rose the most in 2021. Top performers are high-end suburbs. Not surprising, given the surge in home prices across Australia. That is, in the higher value suburbs, the dollar value of the price rises. most.
Australia’s most expensive housing market, New South Wales, accounts for the overwhelming majority of these $ 50,000 or more monthly growth suburbs. Of these, the suburbs of Northern Beach and the eastern suburbs make up the majority.
The suburb with the largest rise in home prices in 2021 was Dover Heights, a suburb of Sydney.
Home prices have skyrocketed in some areas, but homes have outperformed units in terms of price increases over the last 12 months.
These suburbs have much in common, except for the tremendous price increases. It’s all beachside or waterfront suburbs.
Affordability is getting worse for those who don’t have a home yet..
In the 12 months to December 2021, home prices across the country have risen by 23.8% and income has barely increased, raising the hurdle for deposits for those who are not yet homeowners but want to become.
Household wealth has skyrocketed to record highs as home prices have risen, but not everyone is benefiting. In recent years, the homeownership rate of young and low-income people in Australia has declined.
New lending to first home buyers is likely to decline from the historically elevated levels seen in 2021, while everything else is comparable.
Rising home prices are good for some, but not for the first homebuyers, many of whom are dropping out of the market.Photo: Getty
As first-home buyers drop out of the market and home prices rise, intergenerational and intragenerational inequality increases.
Due to the declining access to housing, many young Australians have found themselves priced from the most popular real estate market in decades. By-product? Compound interest inequality.
These growing problems associated with asset ownership and wealth inequality are long-standing problems exacerbated by pandemics.
That said, price growth is expected to continue to slow due to the rapid speed seen in 2021 as the tailwind of low interest rates weakens, options increase and competition intensifies.
That said, activity will continue to be strong, at least in the first half of this year, as new listings continue to rise thanks to potential sellers in response to strong price increases.
In addition, as the case of Omicron strains subsides, 2022 will bring about normal post-pandemic conditions, less hindered by restrictions, and give buyers and sellers who suppressed last year an opportunity to trade undisturbed. Probably.
And for those who already own homes, rising home prices have brought them substantially more equity. This is another support for transaction volume supported by continuous reassessment of housing needs.