The index is now rising at its fastest rate since Q1 2005 with 18 (33%) of markets tracked experiencing price increases by 10% or more in the year to June 2021.
At 16.4%, Australia recorded its highest rate of annual price growth since 2003 and ranks 7th overall, improving both its position from one quarter ago (being ranked 18th with 8.3% annual growth) and one year ago (when ranked 19th with 6.1% annual growth).
Michelle Ciesielski, Head of Residential Research at Knight Frank Australia said: “Scarcity remains the key driver for the significant growth in residential values across Australia, with pent-up demand from those engaging in an incredibly low interest rate environment.
“Analysis of the Australian residential market often acknowledges inconsistencies from city-to-city, but currently we are seeing consistent double-digit annual growth in each capital city, although underlying factors do differ as you dive into each market. A comparison at the end of June 2021 revealed that every capital city in Australia recorded an upward trajectory in annual sales volume, with a 30% average, whilst the number of days a property was listed on the market has fallen by 24% over the past year. This is equivalent to having almost a month (29 days) shaved off the average Australian property listing.
“If our economy was in a more stable position with this performance, we may have seen the delayed APRA revised lending standards brought forward, but for now, Australian homeowners are watching their property values rise at the fastest rate since 2003. Australia’s lending environment has also become considerably more responsible since this time.
“The last time tighter lending restrictions were enforced to cool the market, Australia slipped down into last place on the Global House Price Index in early 2019 for three consecutive quarters, with annual growth falling by an average of 6.6%. Back then, it was Sydney and Melbourne which influenced the overall growth in Australian property prices, ultimately leading to the more responsible lending regime. Now we are experiencing more activity in the smaller capital cities driving up this Australian residential growth.”
Read the Global House Price Index Q2 2021
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