The combined capital city dwelling values grew by 2.8% in March, the fastest growth in 32 years. The Agency report suggests market growth and high clearance rates will continue but may balance out by the end of the calendar year.

At 6.9% regional price growth outstripped the capital cities last year, but according to The Agency's latest report the capital cities have caught up this year. In 2020 one in five expats returned home, this return rate appears to continue in 2021, driving up the market.

With national home values rising 5.8% this year, downsizers are capitalising on the market, particularly given house price growth is outpacing that of units.

To view The Agency's Autumn Report 2021 click here. 

View an overview of each capital city below. 

Brisbane:

• The first property boom for some time, it started in the lower price categories but has worked up to the $4 to $5 million mark.
• The hottest price category within the market is still under the $1 million price point.
• Expats returning and interstate migration are two key drivers.
• Rental yields are very attractive for investors at 4.5%, with vacancy rates in February down to 1.5%.

Perth:

• There has been a dramatic shift in the market, back to 2006/2008 sales volumes. 
• The price bracket of $1 million to $1.5 million is particularly strong, as well as the 10 to 15km radius around Perth CBD.
• Iron ore and other resources are performing well, along with low interest rates, the market predicted to rise 6 to 12%.
• Rental vacancy rates are at 1%, rental prices predicted to rise by 20% with house yields already at 4 to 5% - much higher than eastern states. Investor activity up as is first home buyer activity.

Melbourne:

• After experiencing the harshest lockdown in 2020, 2021 has seen a huge rebound with prices up 4.9% in March QTR.
• Stock levels normally sit at around 50,000 listings, this is currently closer to 38,000. Huge buyer demand, outweighing availability, creating significant buyer depth.
• Both first home buyer activity and off-the-plan activity up.  

Sydney:

• 2021 has brought a huge property boom, dwelling values rose 2.8% in March and the median dwelling value is now $895,933.
• Consumer confidence and FOMO driving buyers, houses outpacing apartments, but the apartment market picking up.
• Regional NSW still booming, particularly those areas with good commuter links to Sydney like the Central Coast and Wollongong.
• Expats a significant factor, even buying sight unseen.

Property Management:

• The lack of foreign students and interstate migration has impacted rental markets, particularly in Sydney and Melbourne.
• Additionally, the shift of short-term rentals to long-term has impacted some markets.
• Family homes and larger units in higher demand, also regional performing well as people try before they buy.

Projects:

• 2021 performing better than 2020, in line with the overall market trends.
• Opal Towers and Mascot Towers issues have impacted the off-the-plan market, buyers far more cautious and looking for reputable developers and builders. A greater interest in brand new finished products.
• Huge demand in the luxury and prestige off-the-plan apartment market, where buyers want input on the finished product. Expat and investors also active in this category.
• High competition between developers for sites.

Finance:

• Banks and alternate lenders competing for business, fixed rates under 2% unheard of prior to Covid-19.
• Overseas funding costs are rising and so banks are likely to raise their interest rates.
• First home buyer lending at its highest since the GFC.
• Renovation loans up by over 40% the three months to January 2021.

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