property boom

Pandemic property boom: will it get too hot to handle?

PHOTO: House prices in Australia jumped by 2.1 per cent in February the biggest month-on-month gain in almost 18 years. CREDIT: BLOOMBERG

Here we go again – interest rates are at an all-time low and housing markets are running hot.

Property tropes missing from the city’s narrative for years are back in the news. Dumps are selling for squillions; big crowds are showing up at auctions; reserves are being smashed.

House prices in Australia jumped by 2.1 per cent in February, the biggest month-on-month gain in almost 18 years according to CoreLogic’s national home value index.

A year ago, as the coronavirus pandemic took hold, a swag of experts predicted a house price rout. But the unprecedented government stimulus unleashed to nurse the economy through the pandemic crisis has been very favourable for residential property.

The boom has been led by smaller cities and regions, which attracted many new buyers during the pandemic. CoreLogic’s figures show during the past year dwelling values have risen by 11 per cent in regional NSW and by 8.3 per cent in regional Victoria.

But big cities are catching up. The median price of a standalone house in Sydney rose by an eye-watering $4200 a week during the last three months of 2020 to hit a record $1.21 million, Domain Group figures show. Melbourne wasn’t far behind – its median house price added $3600 a week during the December quarter to reach $936,000, also a record.