Australian house prices have experienced their fifth consecutive increase in July. This surge can be attributed to the influx of immigrants and the rising costs of construction, coupled with a decline in housing supply.
According to CoreLogic’s national home value index, there was a 0.7% rise in July compared to June. Since hitting a low point in February, prices have increased by 4.1%. This comes after a significant 9.1% decline in April 2022 from the previous record highs.
Despite this upward trend, home values still remain 5.3% below the peak of April 2022, with only Perth, Adelaide, and regional South Australia experiencing new highs in dwelling values during July, as reported by the property research group.
The reopening of international borders has led to a higher-than-anticipated surge in immigration. As travel restrictions imposed during the Covid-19 pandemic are lifted, students and migrants are flooding into Australia. As a result, rental vacancy rates have dropped to historic lows across the nation, indicating a widespread shortage.
While housing values continue to increase across the board, the rate of growth has slowed over the past two months. In May, the growth rate was at 1.2%, but it has since decreased, according to CoreLogic.
The rise in house prices is causing concern for the Reserve Bank of Australia, leading many economists to speculate that it will raise the official cash rate even further this month.
The most significant decline in house price momentum can be observed in Sydney. Tim Lawless, CoreLogic’s research director, stated that after leading the upswing, the monthly growth rate for Sydney house prices has halved from its recent high of 1.8% in May to 0.9% in July.
Additionally, there has been a notable increase in fresh listings in the Sydney market. Compared to the same period last year, new listings are up by 9.9% and 18.0% above the previous five-year average.
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