Newcastle is one of the hottest property markets in Australia after a staggering 3.9 per cent price jump in March, the city's biggest rise in 32 years.
The latest national monthly property report from analysts CoreLogic showed that residential property prices rose 2.8 per cent across Australia last month, a rise unmatched since 1988.
The increase was even more stratospheric in the Newcastle and Lake Macquarie local government areas, where stand-alone house prices have grown 8.1 per cent in just three months and 15.5 per cent in a year.
The median house sale in March stood at a record $687,000, up $26,000 since February. The median apartment price rose 1.8 per cent to $541,000.
Median prices will crash through the $700,000 mark in April even if the monthly growth rate halves.
The overall 3.6 per cent monthly rise in both house and apartment prices was second only to Sydney (3.7 per cent) but well in front of the other state and territory capital cities.
The Newcastle market also outstripped the NSW regional price rise (2.8 per cent).
CoreLogic said the auction clearance in Newcastle and Lake Macquarie last week was 95 per cent, among the highest results in Australia.
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Houses stayed on the market for an average of just 23 days in the three months to March 31, down from 34 days a year earlier, and vendors offered discounts of 2.1 per cent to make a sale, down one percentage point from 12 months ago.
House prices increased 2.5 per cent in March in the rest of the Hunter, outside Newcastle and Lake Macquarie, to a new median of $499,000.
CoreLogic reported that Sydney dwelling values were now 2.6 per cent higher than at their July 2017 peak, despite a 14.9 per cent drop through to May 2019 and another 2.9 per cent fall throughout the COVID downturn.
CoreLogic research director Tim Lawless said new listings were trending 3 per cent above the five-year average across Australia but total listing numbers remained low because buyer demand was high.
"The ratio of sales to new listings is tracking at around 1.1, implying for every new listing added to the market, 1.1 homes are sold," he said.
"Such a rapid rate of absorption is keeping overall inventory levels low and adding to a sense of FOMO amongst buyers."
CoreLogic expects house values to continue rising throughout 2021 and well into next year but the pace of growth to slow.
It said past periods of "exuberance" had been quelled by rising interest rates, weaker economic conditions or changes to credit availability.
It noted that interest rates were unlikely to increase soon and the economic recovery had "some way to go", but government support for home owners and first-time buyers was likely to dry up.
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