House prices surge more than 30 per cent in years since pandemic

House prices have surged more than 30 per cent across Australia since the outbreak of COVID-19, a report has found.

Since COVID was declared a global pandemic in March 2020, property group CoreLogic found its national home value index rose by 32.5 per cent.

The increase meant the median value of an Australian house rose by $188,000 in the four-year period.

CoreLogic’s research director Tim Lawless said despite surging interest rates and high inflation, property prices had been on the rise.

“Despite the strength in the headline figure, the housing market has moved through distinct cycles punctuated by changes in policy, interest rates and demographic shifts,” he said.

“The market slumped 7.5 per cent as interest rates rose from their emergency lows, but as inventory dried up and migration boomed, housing values commenced a new growth cycle in February.”

Rents have also increased in the same period, rising by 32.4 per cent since March 2020, or an extra $150 per week for a median property.

While the pandemic led to strict border measures and Australia largely being cut off from other nations, Mr Lawless said housing demand remained strong, with additional demand in regional areas.

The loosening of restrictions following the outbreak of COVID saw overseas migration spike to record highs, which has gone on to impact housing trends.

“Net overseas migration trends to have a more immediate flow-through to rental demand and a lagged flow-through to purchasing demand,” Mr Lawless said.

“As net overseas migration slows, we should see rental conditions loosen.”

Despite the report indicating there has been an unprecedented demand for housing, Mr Lawless said there had yet to be a supply response.

“Dwelling completions have held relatively flat through the pandemic to-date, with supply chain constraints, materials and labour shortages and a surge in constructions creating a challenging environment for delivering new housing supply,” he said.