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Residential Property Prices Continue to Soar due to Federal Government HomeBuilder Grants Bonanza and Ultra-Low Interest Rates

16 Sep 2021 8:44 AM | Dr Marcus Smith

Residential property prices continued to soar with the national weighted average of median prices across all capital cities growing by 6.7% over the June quarter 2021 to record a 16.8% increase over the financial year, according to data released this week by the Australian Bureau of Statistics.

The data shows across capital cities the largest increases over the year were recorded in Sydney (+19.3%), Canberra (+19.1%), and Hobart (+17.7%).

Over five years to June 2021, the Tasmanian capital recorded the most substantial  increase in residential property prices of 65.3%, followed by Canberra (+36.7%), Melbourne (+32%), Sydney (+27.5%) and Brisbane (19.3%). The only capital city where residential property prices were below the June 2021 level was Darwin down (-6.9%), despite an increase of 12.8% over the year.

Looking at Queensland residential property  prices by type and region, housing prices in Brisbane grew by 20.8% over the year and by 9.5% across the rest of the state, while prices of attached dwellings (flats, apartments etc) grew by 9% over the year in Brisbane and 16.9% across the rest of the state.

Lending Indicators reported by the Australian Bureau of Statistics for the month of July 2021 highlights the role that the Federal Government's HomeBuilder grants program has had in stimulating the national housing market, buoyed also by ultra-low interest rates.

Data for Queensland shows that despite the number and value of new loan commitments for construction of new dwellings to both owner-occupiers and investors fell over the month, they remain up in number over the twelve months to July by 9,187 (+116.9%) and value of $3.802 billion (+109.2%) for owner-occupiers and by 581 (+22.4%) and $280.6 million to investors.

Looking at loan commitments for existing dwellings, although the number of new loans to owner occupiers was down in number and value over the month also, they remain up in number by 20,972 (+39.8%) and value of $11.509 billion (+53.1%) for the year. Loans to investors on the other hand rose modestly over the month by 12 (+0.4%) and $24.3 million (+1.8%), recording an increase in number for the twelve months to July of 9,422 (+56.3%) and $4.857 billion (+73.8%).

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