Here’s how current home prices compare to previous booms

It’s no secret that the property market has gone a little crazy lately, but how do current home values stack up against previous highs?

Record high property prices are being recorded all around the country, with data from the CoreLogic national home value index showing a national increase of 2.8% in March alone, this is 5.6% above the previous market peak that was reached in October 2017. 

But it’s important to put into perspective what is happening right now compared to what we have seen in the past. 

Because while most parts of the country are experiencing a lift in prices right now, there are some cities, in particular Perth and Darwin, where property values are still below the previous price peaks that were reached back in 2014. 

Some cities are obviously reaching new records right now though, including the ACT where dwelling values have hit a new high every month for 19 months. 

What’s happening here in Sydney?

Being that Sydney is the most expensive city in the country, it’s understandable that many people are concerned about prices getting out of control. 

But, while values have reached a new high in the harbour city, it has taken 44 months to do so since its previous peak, in July 2017. 

Back in 2017 a change in lending conditions caused a retreat in property prices, however the market was on its way to recovery through 2019 thanks to interest rate cuts and a relaxation in borrower serviceability assessment rules. 

But, then COVID-19 happened. This caused a massive interruption in the property market and saw prices fall dramatically.  

Luckily, since the end of last year, property prices have been on the up and up, but a large part of this has been the market stabilising since the drop in prices that was seen at the start of the pandemic. 

Property values have lifted 8.1% since bottoming out in September 2020, with the total value of the Sydney property market now 2.6% higher than the 2017 peak.

A number of factors have been credited with helping lift Sydney’s (and the country’s) property prices, including extremely low interest rates, government incentives and increased consumer confidence thanks to Australia’s containment of the virus. 

Will we see price growth continue?

At this stage it’s looking like prices will continue to climb, but whether they continue to do so at the same rate is anybody’s guess. 

Some things may slow down growth somewhat in the short-term, such as a retreat in buyers who are fed up with missing out on properties, or possibly an increase in the amount of properties that go up for sale, but there’s no guarantee that this will happen. 

Longer term if we continue to see prices climb at the same rate we may eventually see economic interventions introduced to help take some of the heat out of the market, with ANZ predicting that this could happen in 2022. While this may not seem prices go backwards, it may at least help slow growth somewhat. 


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