Melbourne Housing Market Update

NAB September 2021 Melbourne Housing Market Update

Despite many parts of the country remaining in some level of lockdown, the housing boom continued to roll on, with national home values rising another 1.5% last month.

The rate of growth remains strong across most areas of the country, but we are seeing mounting evidence the growth trend is losing momentum. The 1.5% rise in August was actually the softest monthly outcome since January this year.

The slowing rate of growth probably has more to do with worsening affordability constraints than ongoing lockdowns. 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.

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.

The latest update takes Australian housing values 15.8% higher over the first eight months of the year and 18.4% above levels a year ago. In dollar terms, the annual increase in national dwelling values equates to approximately $103,400, or $1,990 per week. In comparison, Australian wages are rising at the average annual rate of 1.7%.

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