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Housing in Australia booms with the largest monthly gain in 17 years

Housing in Australia booms with the largest monthly gain in 17 years

Dispelling fears of a coronavirus-induced downturn, the housing market in Australia is booming again as prices record the largest monthly upsurge in 17 years. The nationwide values of houses escalated 2.1 per cent in February 2021, which is the biggest increase since August 2003. Capital city prices increased 2 per cent, in which Sydney and Melbourne recorded the highest.

Reliable sources state that property values of the nation have taken off again after interest rates were cut to a record low by the central bank, which stated that the rates will be staying there for a period of at least three years. While people are in search of larger houses equipped with more space to work from home, the rapid escalation in prices has renewed a fear of missing out, leading purchasers huddling to the market.

According to the Commonwealth Bank of Australia, this trend could witness a surge of 16 per cent in home prices over a period of next two years.

As per Tim Lawless, the Head of Research at CoreLogic, the rapid gains have been triggered by a combination of record-low mortgage rates, government incentives, improving economic conditions, and low advertised supply levels.

Fears that the housing market in Australia would be flooded in the light of distressed sales as people were furloughed by the COVID-19 pandemic, have declined. This is because of a faster-than-expected recovery in the economy, as people began repaying their mortgages after they were provided with loan holidays of six months during 2020. Instead of that, a shortage of supply is assisting to fuel the boom in prices.

While there has been an increase in housing prices across Singapore, the U.S., and Canada, a comeback to boom times in Australia presages to increase an already disconcerting stack of household debt, making it difficult for the young population to step on to the property ladder.

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Nandita Bhardwaj

Nandita holds a management degree with specialization in marketing, and boasts of a short-term experience in the field of recruitment. Following her passion for writing however, she decided to pursue a career in the field of content development. Presently, Nandita pens down news pieces for, spanning the verticals of business, finance, and technology.