Amid tight lockdowns, home values still went up 1.5% in August, still higher than average but the lowest monthly increase since January, according to CoreLogic’s latest index.
All capital cities except Darwin (-0.1%) recorded a strong growth rate relative to units throughout the month. However, CoreLogic has temporarily withdrawn indices for Perth and Western Australia as it investigates a divergence from other housing market measurements.
The data confirms that the rate of price growth has been easing after its peak last March. That month, home values rose 2.8%, with Sydney leading at 3.7%.
Tim Lawless of CoreLogic attributed this moderation to affordability constraints more than the extended lockdowns.
Current housing values are 15.8% higher over the first eight months this year and 18.4% higher over last year—the fastest annual pace of growth in housing values since July 1989. Meanwhile, wages only increased 1.7% over the past year.
“Housing prices have risen almost 11 times faster than wages growth over the past year, creating a more significant barrier to entry for those who don’t yet own a home,” Lawless said. “Lockdowns are having a clear impact on consumer sentiment, however to date the restrictions have resulted in falling advertised listings and, to a lesser extent, fewer home sales, with less impact on price growth momentum. It’s likely the ongoing shortage of properties available for purchase is central to the upwards pressure on housing values.”
For Lawless, the convergence of growth in house vales is evidence of worsening affordability rates.
The table below shows the change in housing values of each capital city as of Aug. 31.
