The latest industry data reveals major moves in the property market

23 Mar 2022

There have been major moves in the market according to the latest data.

ABS: Melbourne prices up 20pc in 2021 

The latest release of the Australian Bureau of Statistics Residential Property Price Index has confirmed that the value of dwellings in the city jumped 20 per cent in the 12 months ending December 31. 

That compares to a national performance of 23.7 per cent. 

Among Australia’s larger cities, Melbourne was outperformed by Sydney, up 26.7 per cent; and Brisbane, up 27.8 per cent. 

Hobart was the top performing market, with values there up 29.8 per cent. 

In separate figures from CoreLogic, the Melbourne market has shown signs of slowing in the early months of 2022. 

The city has recorded negligible month-on-month growth since December, according to CoreLogic’s director of research Tim Lawless. 

“Sydney and Melbourne have shown the sharpest slowdown, with Sydney (-0.1 per cent) posting the first decline in housing values since September 2020, while Melbourne housing values (0.0 per cent) were unchanged over the month, following similar results in December (-0.1 per cent) and January (+0.2 per cent),” he wrote in a market update.

Mornington Peninsula suburbs dominate in Greater Melbourne 

CoreLogic has identified the top ten markets in Greater Melbourne in the 12 months to March, concluding that the Mornington Peninsula has comprehensively outperformed other areas of the city. 

All of the top ten markets were found on the Peninsula, with St Andrews Beach clocking the highest growth figure. The median dwelling (house and unit) value there skyrocketed by 40.2 per cent to sit at $1,737,782. 

Other impressive performances were recorded in Sorrento, up 34.5 per cent to $2,366,080, and Portsea, up 33.6 per cent to $3,425,497. 

Banks revise growth forecasts 

Several major banks have issued revised price growth forecasts for Melbourne houses and units. 

NAB is predicting a rise of 1.2 per cent for Melbourne in 2022 and then a 11.4 per cent fall in 2023. 

“We are seeing house prices ease in 2022 and already we have seen more supply come on to the market. NAB’s forecast is for house prices to remain flat at around three per cent in 2022 before a decline of around 10 per cent in 2023, NAB executive homeownership, Andy Kerr said recently. 

“We expect Sydney and Melbourne to experience the largest declines, while Brisbane and Adelaide will likely see less significant drops in house prices,” he added. 

Westpac is anticipating that Melbourne dwelling prices will end the year flat, before falling 9 per cent in 2023. 

Melbourne unit rents remain below pre-COVID levels 

Melbourne’s unit rents have been recovering from their COVID-19 lull but remain 4.2 per cent below their pre-pandemic level, according to CoreLogic. 

Melbourne unit rents were up 1.2 per cent during January, the latest reporting period. The median rental price in January was $428. 

Record new lending, low fixed rates are history 

January was a record month for new lending, according to the latest ABS Lending Indicators data, though the rate of lending growth slowed from the month prior. 

Lending grew by 2.6 per cent, compared with 4.4 per cent in December. 

Investment lending increased for the 15th consecutive month, rising by 6.1 per cent from December to reach $10.97 billion in January. 

That figure is up by 67.8 per cent from the year prior, according to analysis from comparison website Canstar. 

“The investment sector is underpinning the growth, up a whopping 6 per cent for the month and 67.8 per cent over the year,” said Canstar Group Executive, Financial Services, Steve Mickenbecker. 

“Property prices boomed through 2021, up by more than 20 per cent Australia wide, and the strength in lending suggests that people expect price growth to continue. Investors, in particular, would not be pouring into the market if they were not expecting continuing high prices,” Mr Mickenbecker said. 

Lending to owner occupiers rose by 1 per cent in January to reach $22.69 billion, though signs are emerging that first-home buyers are taking out smaller loans at a slower rate. 

Lending to first time buyers fell by 5 per cent to $5.39 billion in January and the number of first time buyers dipped by 6.9 per cent to 10,964. 

“Affordability issues will particularly bite on first home buyers, already struggling to put together a deposit as property prices run away from them. Now they will have to contend with higher interest rates, aggravating their already higher repayments on bigger loans,” Mr Mickenbecker said.


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