Australian home prices rose at the fastest pace in three decades in March as the prospect of years of record-low interest rates stoked red-hot demand amid a wide scale shortage of available property, particularly detached houses.
The barnstorming recovery in the housing market follows a COVID-19-led crunch early last year and provides a much-needed windfall to consumer wealth and confidence.
Australia's statistician estimates the value of homes rose A$258 billion ($195.93 billion) in the December quarter to hit A$7.7 trillion, and that was before the latest sharp gains.
Thursday's report from property consultant CoreLogic showed national home prices jumped 2.8% in March, on top of a 2.1% increase in February. It was the biggest rise since October 1988 and left prices up 6.2% on a year before.
Houses were again in demand with a rise of 3.0% in March, beating a 1.9% gain for apartments.
Sydney led the charge with a blistering gain of 3.7% in March, and 6.7% for the entire first quarter. Prices in Melbourne and Brisbane rose 2.4%, with Perth up 1.8%.
The major cities also pulled ahead of the regional market, which had been benefiting from an exodus of city dwellers seeking more living space and gardens.
Buyers have been encouraged by the outlook for borrowing costs, with the Reserve Bank of Australia (RBA) repeatedly saying rates were likely to remain at an historic low of 0.25% until at least 2024.
There has also been a lack of supply with advertised stock levels in March 25.5% below the five-year average.
"For every new listing added to the market, 1.1 homes are sold," said CoreLogic's head of research, Tim Lawless. "Such a rapid rate of absorption is keeping overall inventory levels low and adding to a sense of FOMO amongst buyers."
(Reporting by Wayne Cole; Editing by Sam Holmes)
