Australian national house prices are starting to rise again according to CoreLogic. Will ASX shares bounce in response?
Australian house prices – October 2020
According to the latest CoreLogic update, CoreLogic’s national home value index moved back to showing 0.4% growth on the month-on-month numbers in October 2020.
The only decline across the capital cities was Melbourne, which saw a fall of 0.2%.
Sydney managed to show a slight 0.1% increase in house prices. Brisbane house prices went up 0.5% and Perth prices went up 0.6%.
There was an even stronger performance from other cities. Hobart and Canberra house prices both registered a 1% increase in house prices, whilst Adelaide and Darwin house prices went up 1.2%.
That means that Brisbane, Adelaide, Hobart and Canberra are at record highs.
CoreLogic’s Head of Research, Tim Lawless point out the strength of the regional market, with working from home being a factor: “the past two months have reversed the previous mild falls across the combined regional areas. In the seven months since March, regional dwelling values are up 1.7% while values across the combined capitals index have fallen by 2.3%.
“The newfound popularity of working from home is only one factor helping to support regional home prices. More affordable price points, lower densities and lifestyle factors, are also under-pinning the relative strength across many regional areas of the country.”
Summary thoughts
A strengthening of the property market is good for ASX shares that are closely related to property like CSR Limited (ASX: CSR) and Brickworks Limited (ASX: BKW) which are both up. Big ASX banks National Australia Bank Ltd (ASX: NAB) and Australia and New Zealand Banking Group (ASX: ANZ) are also up, though the other two are down.
I think Brickworks could be a solid long term buy today, which I covered in this article.
