Home values have soared at a rate of $1,990 per week over the past year: CoreLogic

Australian residential property prices have increased once again, raising fresh concerns about the issue of housing affordability.

The latest Home Value Index from CoreLogic revealed that dwelling values increased by 1.5% across Australia during the month of August, which means the national median house value is now $666,514.

While August’s rate remained above CoreLogic’s average, it’s the lowest recorded since January, following a trend which has seen price growth trend downwards since reaching a 30-year high in March.

Australian home value changes - CoreLogic Home Value Index (August 31, 2021)^^

Over the past year Australian home values have increased by 18.4% though, which CoreLogic says is roughly equivalent to $103,400, or around $1,990 per week.

And as the table above shows, a number of capital cities have recorded even higher rates of annual growth, including Sydney where the median home value is now comfortably above the $1 million mark.

According to research director, Tim Lawless, when put into context against the current annual wage growth rate (1.7%), the pace of property price increases will have likely made it even more difficult for first-time buyers to enter the market.

“Housing prices have risen almost 11 times faster than wages growth over the past year, creating a more significant barrier to entry for those who don’t yet own a home,” he said.

"Lockdowns are having a clear impact on consumer sentiment, however to date the restrictions have resulted in falling advertised listings and, to a lesser extent, fewer home sales, with less impact on price growth momentum. It’s likely the ongoing shortage of properties available for purchase is central to the upwards pressure on housing values.”

Last month a parliamentary inquiry into the issue of housing affordability and supply was launched by the House of Representatives Standing Committee on Tax and Revenue, prompted by concerns surrounding Australia’s high ratio of housing prices to household incomes as well as falling home ownership rates.

Recent figures published by the Australian Institute of Health and Welfare show that while rates of home ownership have fallen slightly across all age groups over the decades, there have been more pronounced drops in those aged under 35. 

For example, between 1971 and 2016 home ownership rates among 30-34 year olds fell from 64% to 50%, while for 25-29 year olds, rates dropped from 50% to 37%. 

RELATED: Affordability at all-time low in Sydney, do first home buyers still have a shot?

If you are a prospective first home buyer and you’re looking for more information on everything from saving up for a deposit to the home buying process, take a trip to our dedicated first time buyer hub. 

Or you may also be interested in our guides on government schemes like the First Home Loan Deposit Scheme or the First Home Super Saver Scheme.

^^CoreLogic has temporarily withheld results from Perth and Regional Western Australia.