PROPERTY MARKETS ARE FULL STEAM AHEAD!
Last month we said some of the Core Logic numbers were simply mouth-watering.
Core Logic’s Month Housing Data Report shows dwellings continue to rise a further 1.8% across the nation last month.
This is the equivalent of house prices going up $340 per day, or $2,400 per week!
Breaking down the numbers even further:
- Sydney houses up 2.8% for the month and an amazing 10.5% for the quarter
- Melbourne houses up 1.4% for the month and up 6.5% for the quarter
- Brisbane houses up 1.8% for the month, and up 6.2% for the quarter
- Perth houses up 0.8% for the month, and up 4.3% for the quarter
As always, our good friend from Core Logic, Tim Lawless states, “We are expecting housing values will continue to rise throughout 2021 and into 2022, albeit at a gradually slower pace. Demand should be supported by an expectation that mortgage rates will remain at their record lows for an extended period of time, as well as ongoing high levels of consumer confidence as the economy expands at a faster than average pace”
The risks associated with the expiry of mortgage deferrals and less fiscal support have become far less significant. The proportion of home loans that remained on a deferral arrangement at the end of March was just 0.7%, comprising only 0.07% of bank mortgage books.
We are not expecting any material lift in distressed listings. For borrowers that remain in a distressed situation, the lift in housing values has reduced the risk of selling at a loss.
The trend in labour markets will provide an important bearing for housing market outcomes. Labour markets have shown a ‘V’- shaped recovery through the COVID period to-date; although there may be some reversal in the trend due to the end of JobKeeper, this is likely to be temporary.
The RBA and APRA have reiterated they are watchful for any signs of slipping credit standards, but have also noted there has been little evidence of a deterioration in lending standards to-date. A rise in the proportion of riskier types of lending or higher risk loans could be met with a new round of credit policies.
Data by CoreLogic & Tim Lawless: https://www.corelogic.com.au/