Australian house prices continue to fall due to the prolonged economic impact of the COVID-19 pandemic. The slow and measured decline can be seen across the country, with Canberra and Adelaide the only capitals to experience positive growth over the last month. According to
figures from Core Logic, national dwelling values were down -0.6% in July, with -1.6% growth recorded over the quarter for annual growth of 7.1%. While this is far from the sharp drop predicted by many experts, we are likely to see further measured declines in the months ahead.
In the CoreLogic Homes Values Index from
July 2020, Melbourne dwelling values had the worst result at -1.2% for the
month. Sydney recorded -0.9%, followed by Perth at -0.6%, Brisbane at -0.4%,
Darwin at -0.3%, and Hobart at -0.2%. Adelaide and Canberra were the only state
capitals to record positive growth for the month at 0.1% and 0.6% respectively.
Combined capital city growth was -0.8%, and combined regional growth was flat
The situation for the quarter was not much
better, with only Canberra, Hobart, and Adelaide managing to record positive
growth and national figures reaching -1.6%. Sydney and Melbourne are both
performing well when analysed on an annual basis, however, with 12.1% and 8.7%
growth respectively for the year ending July. Darwin and Perth were the only
two capitals to record negative growth over 12 months at -2.2% and -2.5%
respectively. The median national dwelling value now sits at $552,912, with
Sydney leading the way with $866,110, and Melbourne at $678,334.
According to CoreLogic’s head of research
Tim Lawless, COVID-19 has had a negative but measured impact on Australian
housing market so far: “The impact from COVID-19 on housing values has been
orderly to-date, with CoreLogic’s national index falling only 1.6 per cent
since the recent high in April and housing turnover has recovered quickly after
it’s sharp fall in late March and April."
There are many reasons for this relative
optimism, with the wider economic environment supporting house price growth
despite record levels of unemployment and slow business activity. According to
Mr Lawless, “Record low interest rates, government support and loan repayment
holidays for distressed borrowers have helped to insulate the housing market
from a more significant downturn." The combination of recent support and
long-term momentum seems to be controlling the rate of the drop, with clearance
rates up as data points towards a measured market decline.
The long-term state of the Australian
housing market is also favourable, with growth over the last few years likely
to influence price stability as we emerge from the pandemic. "Advertised
supply levels have remained tight, with the total number of properties for sale
falling a further 4.3 per cent in the four weeks to July 27th, sitting 15.2 per
cent below where they were this time last year." said Mr Lawless, adding
“Additionally, increased demand driven by housing specific incentives from both
federal and state governments, especially for first home buyers, have become