Wayne Cole

SYDNEY (Reuters – Australian home values continued to climb in February. Sydney however saw the first decline in 17 month as a result of a rush for supply, increasing mortgage rates, and stretched affordability.

CoreLogic released Tuesday’s figures showing that national home prices increased 0.6% between January and February, which saw them increase 1.1%.

The major cities saw prices rise by 0.3% while those in other regions experienced a 1.6% increase. This was due to a pandemic-induced rush for greener pastures.

CoreLogic’s research director Tim Lawless said that “Demographic tailwinds,” low inventories, and continued demand for coastal or treechange homes options continue to support strong upwards prices across regional housing markets.”

Prices rose 20.6% in the country, and the median home was worth A$728,034. A comparable home in Sydney sells for A$1.1million (798,600.00), which is why there’s been a slowing of the Sydney real estate market.

In February values in Sydney fell 0.1%, Melbourne flattened and Perth gained 0.4%. Brisbane did better, with an increase of 1.8% and Adelaide gaining 1.5%.

Long-term price booms have been good for consumer confidence and household wealth. According to the Australian Bureau of Statistics, the stock of housing increased by one trillion dollars between September and September. It reached A$9.3 trillion (6.57 trillion).

Regulators have been concerned about the rapid increase in housing debt, and they tightened lending regulations last year.

Fixed mortgage rates have been increasing along with yields on government bonds as the Reserve Bank of Australia flagged an increase in interest rates for later this year.

On Tuesday, the central bank will hold a policy meeting. It is likely to remain patient in the face of geopolitical uncertainties and the persistent drag from the coronavirus.

($1 = 1.3774 Australian dollars)