The pace of growth in housing value accelerated sharply to 1.2% in May, according to CoreLogic figures. Not only that – every capital city recorded a positive change in property values in May.
Sydney led the way, with a 1.8% increase in dwelling values over the month. That’s the highest monthly rise for the city since September 2021.
Brisbane (1.4%) and Perth (1.3%) also performed well.
Tim Lawless, CoreLogic’s research director, attributes the positive trend to limited housing supply and growing demand. Increased competition among buyers has led to higher auction clearance rates and faster sales with less negotiation.
“With such a short supply of available housing stock, buyers are becoming more competitive and there’s an element of FOMO creeping into the market. Amid increased competition, auction clearance rates have trended higher, holding at 70% or above over the past three weeks. For private treaty sales, homes are selling faster and with less vendor discounting,” he said.
Regional housing value is increasing, with a 0.5% rise in May. However, the rate of growth in regional areas is not keeping up with major cities, which saw more than triple the growth in the past three months.
In May, the number of homes advertised for sale dropped further. Capital cities, except for Darwin and Canberra, experienced a decline in new listings. Despite this, there was a slight increase in home sales, although they remain below peak levels. The limited housing supply relative to demand is pushing housing values higher, reminiscent of a period of high migration and rising values seen in 2007.
This article originally appeared on Finance Focus.