Sydney’s median house price has risen $100,000 since the new year began as property values defy a global pandemic, leaving investors and first-home buyers battling it out at auctions.
Property prices are surging in capital cities across the nation led by houses in Sydney, which jumped in value by 4.3 per cent last month on CoreLogic data to a new median of $1,112,671. At the start of the year the median Sydney house price was $1,015,354 and about half of the six-figure price growth recorded for the first quarter of the year happened in March.
Sydney dwelling prices were up 3.7 per cent overall for March, with apartments rising 2.1 per cent. Property prices nationally increased 2.8 per cent over the month.
Over the past 12 months the northern beaches have seen a $167,156 rise in the median property value to about $1.9 million. Even relatively affordable areas, such as the Central Coast, have seen the median price rise 13.6 per cent, or $88,561, to above $740,000. Baulkham Hills and the Hawkesbury recorded a $111,610 price rise.
Major banks, economists and analysts now suspect the boom could slow rapidly due to expectations regulators may put their foot on the brakes to stop the market from overheating.
ANZ recently predicted property prices could surge as much as 19 per cent in Sydney and 16 per cent in Melbourne before slowing in 2022. The bank’s economists say regulators could intervene to curb lending to stop the market from overheating, though so far the Australian Prudential Regulation Authority has not been concerned about lending standards.
On the latest Australian Bureau of Statistics lending data released on Thursday, investors took out 4.5 per cent more loan commitments in February than the month before. This potentially signals a shift in the market, with first-home buyers and owner-occupiers so far dominating lending statistics. Between February 2020 and the same month in 2021, first-home buyer loans have risen 65.8 per cent in reaction to substantial state and federal government incentives and low interest rates.
CoreLogic research director Tim Lawless said the last time prices surged at this level in Sydney was in June and July 2015, but “the pace of growth rapidly slowed as limits on investor lending kicked in”.