The latest Domain house prices report shows house prices hit a record high at the end of 2020 in all but two Australian capital cities.
According to Domain, the median house price across all capital cities in the three months to 31 December 2020 was $852,940: a 5.8% increase on a year ago.
This report comes after some economists predicted up to 30% price falls throughout 2020.
All but two capital cities - Darwin, and Perth - are at record high prices for houses.
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The results were more of a mixed bag for units, with Sydney's down 0.3% on the year, Brisbane's down 3.0%, and Canberra's units down 1.3%.
Adelaide and Darwin had the strongest gains, up 13.5% and 7.5% respectively, while Melbourne's gain of 4.4% over the quarter means unit prices in the cultural capital are now at a record high.
Gap between unit and house prices widening
The national 4.1% price gain over the December quarter for houses represents the steepest quarterly jump in four years, according to Domain's senior research analyst Dr Nicola Powell.
"The price gap between houses and units in Sydney is continuing to widen. Over the past three decades it is rare that house and unit prices move in opposite directions annually," she said.
"Weaker investor activity has disproportionately impacted unit prices because they tend to be the preferred property type. There are also particular locations with increased supply as a result of heightened development in recent years.
"Changed lifestyle preferences post-lockdown and the option of remote working has driven demand to outer suburban and regional locations as buyers seek affordability, liveability, space and greater value for money."
The report comes after the Australian Bureau of Statistics found various government initiatives to stimulate housing stemmed the new house cost rise, affecting the consumer price inflation index.
Dr Powell said Australia's handling of the pandemic and the associated economic fallout placed confidence in home buyers.
"Government support measures, a remarkable recovery in consumer confidence, successful containment of COVID-19 outbreaks and the pessimistic outlook for property prices failing to materialise have played a role in supporting market activity and prices," she said.
"Record low interest rates have spurred buyer activity with cheaper credit easing the affordability of mortgage repayments.
"This has ultimately created competition between buyers, driving house prices higher."
Earlier in the month, Domain found rents are at a seven-year low in the capital cities despite the price gains, with the median unit in Brisbane now more expensive to rent than the median in Melbourne.
Capital City Home Prices, December Quarter 2020
| Capital City | House Price | Unit Price | Year-On-Year Gain (House/Unit) |
| Sydney | $1,211,488 | $729,840 | +6.7% / -0.3% |
| Melbourne | $936,073 | $569,677 | +3.9% / +2.5% |
| Brisbane | $616,387 | $395,677 | +5.6% / -3.0% |
| Adelaide | $574,264 | $350,122 | +6.1% / +13.5% |
| Canberra | $855,530 | $485,410 | +9.1% / -1.3% |
| Perth | $563,214 | $347,585 | +6.3% / +4.4% |
| Hobart | $564,091 | $432,552 | +12.4% / +2.5% |
| Darwin | $533,845 | $285,539 | +3.6% / +7.5% |
| National | $852,940 | $574,245 | +5.8% / +0.9% |
Source: Domain
Photo by Marc Sendra Martorell on Unsplash
