CommSec's Craig James says there's downward pressure on home prices
Staff ReporterDecember 7, 2020
CommSec chief economist Craig James believes home prices may wane over the coming year as more new homes are completed in Sydney, Melbourne and Brisbane.
In his latest research note he says nationally, lower priced properties have been outperforming higher-priced properties for the past five months.
"The housing market remains generally healthy. The key concern is what happens to prices over the next year as more new homes are completed," he said.
"The lower quartile of properties by value have shown price increases of 9.8 percent over the past year while the upper quartile of properties by value are up just 6.2 percent.
"Over the past two months, prices of free-standing houses have risen by 2.2 per cent while apartment prices have edged up just 0.3 per cent. With a lot of apartments being built across the country, the gap between house and apartment prices is likely to widen.
"The CoreLogic Home Value Index of capital city home prices rose by 1.1 percent in August and was up 7.0 percent over the year. Back in July, home prices had grown at the slowest annual rate since September 2013 (6.1 per cent).
"In regional Australia, house prices fell 0.1 per cent in July and were just 1.4 per cent higher than a year ago. (regional prices cover just houses and data is up to the end of July).
"In capital cities, house prices rose by 1.3 percent in August while apartment prices rose by 0.3 percent. House prices were up 7.2 percent on a year ago and apartments were up by 5.5 percent. "