Limited stock of homes for sale is helping to push values higher as the spring selling season gets into full swing.
Deal values have continued to edge higher every month since February, according to the latest data from industry researcher Cotality (formerly CoreLogic).
The market has registered another 0.7% upswing for August. For metropolitan areas, the monthly increase in values is 0.8%.
Annual market growth is currently tracking at 4.1%. However, if the 0.7% trend continues, the market will eventually achieve an 8.4% annual increase in values.
The average home price in Australia is now at a record high of $848,858.
Several factors are influencing the market currently.
Firstly, there is pent-up demand from buyers who are feeling optimistic following three interest rate cuts this year and the promise of a fourth in the near future, possibly before Christmas.
Secondly, a 20% shortfall in the number of properties for sale compared with the five-year average has strengthened home values.
Agents are saying there’s a shortage of family homes available to buyers seeking their second and third subsequent properties.
These family homes are being held by owners who complain of two factors – a shortage of suitable properties to downsize, and the eye-watering, six-figure stamp duty cost of making their next purchase.
Put simply, the high cost of stamp duty charged by state governments is a significant brake on the market.
In this current climate, we continue to see clearance rates at weekly auctions hovering around 75%, especially in the bellwether market of Sydney.
Anecdotal evidence suggests many of the 25% of properties that are passed in are then sold quickly after the auction, often to the highest bidder.
Cotality said in its latest report: “Vendors are entering spring in a strong position, with low competition and rising prices across nearly all regions.”
Cotality Australia’s research director, Tim Lawless, added: “We are seeing a clear mismatch between available supply and demonstrated demand placing upwards pressure on housing values.
“The annual trend in estimated home sales is up 2% on last year and tracking almost 4% above the previous five-year average. At the same time, advertised supply levels remain about -20% below average for this time of the year.”