Australia’s housing boom grows as prices rise the most since 1988

Photographer: Brent Lewin / Bloomberg

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Australia’s real estate boom accelerated in March as the country’s economy and labor market continue to recover strongly from the pandemic.

Nationwide home values ​​jumped 2.8% in March, the biggest increase since October 1988, according to data from CoreLogic Inc. released Thursday. Sydney led the appreciation, jumping 3.7% last month and rising 6.7% in the first quarter.

“The last time Sydney home values ​​recorded such a strong quarterly trend was in June / July 2015,” said Tim Lawless, head of research at CoreLogic. “As a result of this brief surge, the pace of growth slowed rapidly, with limits on investor lending stepping in to slow the market.”

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Rising house prices have been fueled by record lending rates, an improving economic outlook, an under-supply of new homes and government incentives. Goldman Sachs Group Inc. expects prices to climb 15% over the next two years as people seek larger homes, with more. a workspace, amid rekindled fears that buyers will miss it.

As house prices soar from Singapore to Canada and the United States, a return to good times in Australia threatens to inflate an already worrisome pile of household debt and make it harder for young people to buy their homes. first house. Australia’s prudential regulator is considering steps it could take to fresh prices to curb excessive risk-taking.

“We believe that a tightening of macroprudential policy will be put in place in the second half of the year,” said Diana Mousina, senior economist at AMP Ltd.