The August increase takes housing value growth to 7.9% for the first eight months of the year, with Melbourne seeing an 11.6% jump.
The strong result was due to solid confidence from buyers and the low numbers of homes for sale, according to Tim Lawless, director of RP Data research.
‘These buoyant conditions sit in striking contrast to the same time last year, when values were falling,’ Lawless said.
But not everyone in the industry is confident.
Talk of an increase in interest rates and a severe shortage of residential property could de-rail Australia’s real estate recovery, various experts are warning.
Some parts of the country are likely to see bigger problems than others with Western Australia cited as having the worst shortage.
‘There's no question there is going to be a major housing crisis in Western Australia.
The only question is when,’ declared NAB state business banking chief Andrew Whitechurch.
He explained a lack of land release, a ‘ridiculous’ approvals process creating roadblocks for developers and an expected increase in population pointed to serious problems ahead.
Then an expected increase in interest rates before the end of the year will make it harder for buyers especially since the first time property buyers grant scheme which has been credited with stimulating the real estate recovery is coming to an end.
According to billionaire property developer Harry Triguboff any interest rate rise would undermine the rebounding property market, kill off new developments and drive up rents.
He said that foreign buyers are wary of investing in Australian property.
Also current developments are mostly the result of approvals on land already owned, with few if any developments in the pipeline.
‘There are no new sites being purchased because residential developers and builders cannot get finance even at current rates,’ he wrote in a recent paper.
‘And there are no new approvals being granted, because applications have dwindled and consents are like hen's teeth. All of this will just put more and more pressure on supply.’
