February property review

The national market rise is the highest monthly growth in 17 years, rising 2.1% led by the resurgence of the major capitals. 

February saw national house prices rise 2.1% after huge activity in the Sydney and Melbourne markets after what was a subdued 2020 for the major capitals. Sydney saw 2.5% growth in the month although is yet to eclipse the September 2017 market high, though at this rate it should only be a matter of months until we see new records.

The national market rise is the highest monthly growth in 17 years. 

Whilst interest rates and stimulus continue to contribute, it is a shortage of housing supply that is driving up values. Listings remain on average 13.1 lower than this time last year nationally, though Sydney and Melbourne supply is increasing and sits above the average. 

Interestingly, a lot of the growth is being driven by ‘the upper quartile’, or premium listings coming onto the market, the same housing sector that led declines during 2020. 

Whilst regional growth remained strong at 2.1%, there is now greater parity with the rest of the market, which does have some catching up to do given market losses were more prevalent across metro than regional areas in 2020. 

Whilst disparity remains in the unit market, there were some positive signs with the first positive month in unit value growth since the pandemic. There is careful optimism about the unit sector as favourable conditions pull investors back into the market, and talk of international students returning to bolster the rental market. 

Rental markets remain weak, particularly in the major capitals and particularly in the unit sector. 

In another positive sign, a number of major banks and market commentators have lifted their medium (2-3) forecasts during February, strengthening the argument for a sustained period of strong property market growth.