Houses in Truganina

Australian house prices rising at fastest yearly pace since 1989

PHOTO: Houses in Truganina in Melbourne’s west. Australian house prices are surging at their fastest annual pace in more than 30 years, CoreLogic figures show. Photograph: Christopher Hopkins/The Guardian

Australian house prices are growing at their fastest annual pace since 1989, although there are further signs the boom is coming off the boil.

CoreLogic’s national home value index rose 1.5% in August to an annual rate of 18.4%.

While the monthly increase was still above average, it was the smallest rise since January.

CoreLogic’s research director Tim Lawless said the slowing rate of price growth probably had more to do with worsening affordability constraints than ongoing Covid-19 lockdowns.

“Housing prices have risen almost 11 times faster than wages growth over the past year, creating a more significant barrier to entry for those who don’t yet own a home,” Lawless said.

Annual wage growth is currently running at just 1.7%.

“Lockdowns are having a clear impact on consumer sentiment, however, to date the restrictions have resulted in falling advertised listings and, to a lesser extent, fewer home sales, with less impact on price growth momentum,” he said.

He said an ongoing shortage of properties available for purchase was likely central to upward pressure on housing values.

Housing values rose in every capital city in August, apart from Darwin, where they declined 0.1%.

CoreLogic also withheld its index results for Perth and regional Western Australia “pending the resolution of a divergence from other housing market measurements in WA”.