Into the Australian housing market, home prices there continue to see healthy growth, according to the most recent data released by CoreLogic Inc., steady at elevated levels. Surprisingly, the resilient housing market continues to hold onto an upward trajectory in growth through September 2024.
The report posted a home price increase of 0.8% in September alone, bringing the year-over-year change to a scorching 8.2%. This presents an additional acceleration from the very strong performance seen earlier in the year and resists rises in interest rates and other potential economic headwinds.
The Research Director of CoreLogic, Tim Lawless, said, "The consistent strong demand for housing, combined with low supply factors, has yielded very solid price growth. House owners and buyers remain extremely confident in the future performance of the market. "This confidence exists despite uncertain and chaotic global economic conditions.
Interestingly, this growth is not contained within metropolitan areas, as regional markets undercut by the big cities follow similar trends. In these places, housing has increased 7.9% over the last year, further giving a wider girth to the housing boom. It partly relates to flexibility in working arrangements and attraction toward an easygoing lifestyle away from the centers of cities.
In the future, some analysts believe that the market has cooled off with rates continuing to rise and more expensive mortgages. Others believe the shortage of housing stock, coupled with strong immigration rates, means demand will stay high-and prices with it.
Divergent growth across different regions was also reflected: Sydney and Melbourne were atop the list, with 1.1% and 1.0% monthly increases, respectively, while other capitals such as Brisbane and Perth registered more modest gains. The broad upward trajectory of major markets has underlined the across-the-board strength of the housing sector.
Meanwhile, the Australian Prudential Regulation Authority expressed its own concern over the rapid acceleration in home prices and flagged possible regulatory interventions to stabilize the market. These could include stricter lending criteria or measures to prevent speculative investments.
According to Sarah Hunter, Chief Economist at BIS Oxford Economics, "The strength in the housing market is a double-edged sword. On one hand, it reflects overall economic resilience and confident consumers. On the other, it raises questions about affordability and financial stability-particularly for first-time buyers."
With these dicey dynamics at play, Australia is under the watchful eye of many stakeholders involved in government authorities, financial institutions, and real estate professions to see how much longer this never-seen-before growth phase could sustain itself.
For the moment, the Australian housing market remains on a surefooted buoyant trajectory, with September's data reinforcing the bullish sentiment that has pervaded the sector for much of 2024. Very much open was the real question of whether it would last into 2025.
The situation is ever-evolving, and therefore, further updates are awaited, which will be made in due course as more data emerges.
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Author: Daniel Foster
