James Weekly Snapshot – March 17, 2021
For the last few weeks, we’ve talked about how Australia’s house prices are experiencing a 17-year high rate of growth.
Well it turns out it’s not just the Australian market experiencing that, it’s a global phenomenon. Median house prices are up by 21.5 per cent in New Zealand over the past 12 months and between 5 per cent to 9 per cent in Canada, the USA, UK and Japan!
We’re halfway through March and it doesn’t look like that pace of growth is going to stop anytime soon.
Auctions continued to achieve 80% plus clearance rates over the weekend and a number sold for well above their reserve price, another good barometer of a surging market.
Last weekend alone, the auction of a five-bedroom home in Sydney’s outer west surprised everyone when it sold for $1 million above the reserve! The home in Mount Vernon sold under the hammer for $5 million after 13 bidders registered for the auction. It had a reserve of $4 million, that’s a 25% difference between the reserve and sale price!
It wasn’t the only property to soar above its reserve price, three others in Sydney sold for $600,000 (33%), $400,000 (20%) and $780,000 (18%) respectively above their reserves.
What does it mean? It means it might be a good time to get a valuation done on your home and investment properties!
In other news, the 31st of March marks the end of the Federal Government’s HomeBuilder incentive scheme. The initiative has been hugely successful in stimulating the construction industry. It was announced on 8 June 2020, with the Federal Government offering between $15,000 and $25,000 to owner occupiers building a home.
This week the annual National Land Supply Report was released by the UDIA and Research4. The report details total land sales throughout Australia in 2020, and the results were mind-boggling.
There was a record number of land sales in Australia in 2020 with 53,760 blocks sold, an increase of 87 per cent on the previous year. Sales were up 36 per cent on the previous record year of 2018.
Land transaction numbers are up in all markets with 32 per cent of all sales being done in Melbourne, followed by 23 per cent in South East Queensland, meaning those two markets accounted for more than half the blocks of land sold in Australia.
While all capital cities were different, the overall trend was that land prices stayed consistent, although block sizes, (and likely proximity from the city, which is not measured) dropped.
It will be interesting to see how those numbers look when the next report is released covering the March quarter (and therefore the end of HomeBuilder)!