Wayne Cole

SYDNEY (Reuters – Australian home values saw a boom in 2021, as low interest rates drove prices skyward. Prices rose by an average A$4,200 each week in Sydney.

CoreLogic, the property consultancy released figures on Tuesday showing some heat in the market. National home prices increased by 1.0% in December, as compared to 1.3% November and 2.8% earlier in the year.

The year saw prices rise 22%, with 26% more in regions than the 21% state capitals. This is a result of a shift towards country living.

Sydney saw a 0.3% decrease in December. However, it still managed to increase its year-over-year gains of 25%. The median home value was almost A$1.1million ($790,000.460).

Melbourne experienced a 0.1% dip in December. However, Brisbane surged 2.9% while Adelaide rose 2.6%.

Consumer confidence and household finances have been greatly impacted by the boom. Australian Bureau of Statistics has estimated that the stock of housing assets exploded by trillions of dollars over the six-month period ending September, to A$9.3 Trillion.

Selling in Sydney or Melbourne was finally possible because of the hot market. Listings increased sharply in the latter part of the year which contributed to the slowdown.

CoreLogic’s Research Director Tim Lawless noted that home sales in 2021 rose 40% over the average for the decade at 653,000. This indicates strong demand.

Lawless stated that there is an underlying reason housing prices are so high because of the mismatch in housing supply and demand.

“As stock levels stabilize and affordability constraints, as well as tighter credit conditions, drag down demand it is reasonable to anticipate that growth conditions will be less hospitable in 2022.”

($1 = 1.3916 Australian dollars)