Australian house values have fastest quarterly growth in more than 32 years

National home values have risen a staggering 7 per cent in the three months to May, the highest quarterly growth rate in more than 32 years.

Not since November 1988 have property values increased so sharply, according to the latest CoreLogic data.

The newly released data also reveals that regional home values have far outpaced capital city dwellings growth over the past year.

Regional dwelling values were up 15.2 per cent over the year, compared with a 9.4 per cent lift in the value of the combined capital cities housing market.

But, over the past three months, the capital city property markets have been playing catch up, with Victoria the only state where regional home values grew faster than capital city values.

The data shows regional home values in Victoria were up 6.2 per cent in the three months to May, compared with a 5.5 per cent growth in Melbourne home values.

CoreLogic head of research Eliza Owen said the quarterly data showed that, apart from Melbourne, which was hardest hit by coronavirus lockdowns in 2020 and was just emerging from its fourth lockdown, “buyers are getting more bullish about capital cities again”.

“I think cities are becoming more revitalised again. In Sydney, for example, we have seen a resurgence in business activity and people returning to the CBD and so there’s probably less incentive to leave cities as a result, apart from Melbourne that has found itself in lockdown again,” she said.

Ms Owen said investors returning to the market were also pushing up capital city prices, particularly in Sydney.

The latest CoreLogic insights also reveal that it is the high end of the housing market that continues to lead capital growth in Australia’s largest cities.

In the three months to May, the highest 25 per cent of housing stock across Sydney climbed 12 per cent, compared with a 5.2 per cent increase at the bottom 25 per cent of the market.

It was similar in Melbourne, where the higher end grew by 6.5 per cent, compared with 3.5 per cent at the bottom end, and in Brisbane, where growth at the top end of the market was 7.5 per cent, compared with 3.5 per cent at the other end.

The latest CoreLogic data shows every capital city recorded a rapid rise in home values in the three months to May, with Sydney home values increasing most significantly, by 9.3 per cent, including a massive 3 per cent jump in May alone.

This was followed by quarterly increases of 7.9 per cent in Darwin, 7.7 per cent in Hobart and 6.5 per cent in the ACT.

Brisbane dwelling values were up 6.2 per cent for the quarter to May, Melbourne values increased by 5.5 per cent, closely followed by Adelaide, which saw appreciation of 5.4 per cent, and Perth, which had a quarterly growth of 3.8 per cent.

Ms Owens said the significant increase in new listings, compared with the five-year average, as well as a reduction in the number of days properties were on the market, showed “it is still very much a seller’s market”.

Fresh listings to the market increased through May, and sat 14.7 per cent above the five-year average, for this time of year, the data shows.

Total listings remained 23.8 per cent below the year-year average due to strong buyer demand.