AUSTRALIA’S housing boom is back in full swing with prices in Melbourne reaching a record high, and Sydney not far behind.
Property values in the eight state and territory capitals surged 1.2% last month, according to CoreLogic, Inc. data released Monday.
The upswing in prices, which started mid-2019, has already recouped most of the losses of a near two-year swoon as record-low interest rates and looser borrowing standards sent buyers flocking back to the market.
In Melbourne, Australia’s second-most populous city, home prices jumped 1.2% last month to surpass the previous peak reached in September 2017. Home values in Adelaide, Brisbane, Canberra and Hobart also hit new highs.
Sydney posted the biggest monthly gain, with home values climbing 1.7%. At current rates of growth, prices are on track to recoup all of their 15% peak-to-trough decline and reach a new record by the end of May, CoreLogic said.
“The primary factors driving this rebound remain in place and include an extremely low cost of debt and improved borrowing capacity,” said Tim Lawless, head of research at CoreLogic. “However, considering the sluggish pace of household income growth, housing affordability is eroding rapidly which is likely to see some parts of the market become less active.” — Bloomberg