Strong demand from investors continued to place upward pressure on residential property prices in Australia last month, suggesting that the country’s property boom is far from over.
Corelogic report that property investors now make up almost half (46%) of all new mortgage commitments in Australia, which in turn is pushing up house prices.
“Improved sentiment looks to be supporting demand and therefore prices of housing," said David Cannington, senior economist at ANZ.
The latest CoreLogic RP Data Home Value index, which monitors home prices in the capital cities, shows that prices in April rose by 1.7% compared to the previous month.
“We are not in a boom phase," Cannington added. “The [combined] 1.7 per cent comes after relatively flat conditions in the previous three months. It is probably statistical clawback. The housing market is still one of growth but a moderating growth.”
In April prices increased by 2.4% in Sydney and 1.1% in Melbourne, while they also rose by around 2% in Brisbane and Adelaide. House prices even increased Perth, which has been hit by the end of the mining boom, albeit at a lower rate of 0.5%. Only prices in Hobart and Darwin fell for the month.
“The annual rate of growth in Sydney peaked at 18.4% in July last year and has since moderated back to slightly less than half the peak rate of growth, at 8.9% over the most recent 12-month period,” said Tim Lawless, research director at CoreLogic RP Data.