Dwelling values in Australia finished the financial year on a high note, but a loss of momentum is clear, according to CoreLogic Head of Research for Australia, Eliza Owen.
National home values rose 1.9 per cent in June, taking annual growth to 13.5 per cent for the financial year.
"This is the highest annual rate of growth seen across the Australian residential property market since April 2004, when the early 2000's housing boom was winding down after a period of exceptional growth. However, there are some markets where performance is starting to ease more notably," said Ms Owen.
Each of the capital cities saw an uplift in dwelling values in June, ranging from a 3.0 per cent rise in Hobart to a 0.2 per cent lift in Perth.
The performance gap has narrowed between regional Australia and the capital cities, though regional Australia did outperform slightly in monthly growth terms, rising 2.0 per cent through June compared to 1.9 per cent across the combined capital cities.
Darwin maintained the highest annual rate of growth across the capital cities, increasing 21.0 per cent in value over the financial year, followed by Hobart (19.6 per cent).
Across regional Australia, regional NSW had the highest annual growth in dwelling values (21.1 per cent), followed by regional Tasmania (20.8 per cent).
Ms Owen reaffirmed the strong demand-side factors underlying growth. "Before the recent uncertainty of growing COVID-19 case numbers, there were plenty of demand-side factors driving housing market growth through the first half of 2021.
"In May, the unemployment rate fell to 5.1 per cent, and the underutilisation rate fell to 12.5 per cent. Consumer confidence remained elevated through June, although down from the recent April highs.
"Elevated savings accumulated through COVID-restrictions last year, along with a more confident consumer sector, has encouraged consumption of larger goods, such as housing. This has all occurred against a back-drop of continued low mortgage rates, which is one of the most significant demand drivers."
Ms Owen noted total advertised stock remains relatively low. "The latest listings count from CoreLogic indicates that in the 28 days to June 27th, total advertised stock remained 24.4 per cent below the five-year average."
This dynamic of strong consumer demand, and low housing supply, continues to create some urgency among buyers.
There are signs that some heat is coming out of the market.
Across the capital cities, a loss of momentum was most evident across Perth and Darwin.
In Perth, the monthly growth rate in values had averaged 1.4 per cent between January and May 2021, but fell to 0.2 per cent through June.
Across Darwin, the monthly growth rate averaged 2.1 per cent between January and May, but was just 0.8 per cent through June.
Softer growth rates are also emerging at the 'high end' of the market.
"This easing in the pace of growth at the top end of the market is another clear sign of a shift in momentum," said Ms Owen.
"The rest of the market tends to follow movements at the high end, and this is the first time in nine months that the high-tier growth rate has not accelerated."