Sydney property prices have recovered from a slump in 2019 and during the COVID-19 crisis to reach a new record high, according to CoreLogic.
The property research group’s daily hedonic home value index has shown that since “finding a floor” in October 2020, Sydney property values have risen by 5.7 per cent, while the index reached a new record high last week.
Property values had plummeted by 15.3 per cent between July 2017 and May 2019 in Sydney, but the market was on a path to recovery thereafter.
However, the coronavirus pandemic interrupted this recovery, with housing values falling again through the worst phase of the pandemic in 2020 by 3.0 per cent, CoreLogic figures showed.
However, according to CoreLogic, Sydney property values have not only recovered from its COVID-19-induced slump, but surpassed the peak recorded in 2017.
Median property value figures in Sydney provided to The Adviser by CoreLogic show that both “all dwelling” and “only houses” are at record highs, at $895,933 and $1,061,229, respectively.
However, CoreLogic said the median value of “only units” did not reach record highs, and is at $738,254.
Meanwhile, according to CoreLogic’s daily hedonic home value index, Melbourne dwelling values have remained 1.3 per cent below their pre-COVID-19 high, while Perth values have remained 16.9 per cent lower relative to the 2014 peak.
The index for Sydney is a number adjusted to reflect changes in the value of the entire Sydney dwelling market.
Commenting on the trends in Sydney, CoreLogic executive research director Tim Lawless said he is not surprised by the recent strong capital gains in housing values, which he added had led “another capital city to move to new record highs”.
“The fresh record high is great news for Sydney home owners, but highlights the challenges for non-home owners looking to participate in the housing market as values rise faster than incomes,” Mr Lawless said.
The latest figures have followed recent data from CoreLogic, which showed that February marked the largest month-on-month spike in home values since August 2003, with home values rising by 2.1 per cent in February, the largest monthly increase in 17 years.
Sydney and Melbourne were found to be the strongest-performing markets, recording a 2.5 per cent and 2.1 per cent rise in home values over February, respectively.
Meanwhile, data from the Housing Industry Association (HIA) showed that housing affordability has deteriorated at a greater rate in the regional areas of Australia, with the HIA Affordability Index for regional Australia falling by 3.7 per cent in the December 2020 quarter.
While housing affordability also declined in the capital cities of Australia, it was not as sharp as in the regional areas, with the index dropping by 2.5 per cent in December 2020 quarter.
[Related: Perth’s sales listings drop to 10-year low]
Malavika Santhebennur is the features editor on the mortgages titles at Momentum Media.
Before joining the team in 2019, Malavika held roles with Money Management and Benchmark Media. She has been writing about financial services for the past six years.
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