The Sydney property market saw the biggest
moves in March compared to February, with prices up 1.7% after falling by 15%
during the recent downturn. While prices are still down 3.7% from their peak,
the median house price in Sydney is once again above a million dollars.
Melbourne also had a positive month with prices up 1.2%, which was enough to
send the Victorian capital to record high values.
The overall national value increase was
1.1%, with all state capitals experiencing growth other than Darwin. Hobart and
Canberra were both up 0.8%, the regional market grew by 0.7%, Brisbane was up
0.6%, Perth grew by 0.3%, and Adelaide was up by 0.1%. While Perth had a
positive month, housing values remain 21% below their peak. Darwin home prices
have also been struggling over recent months, falling another 1.4% to put them
33% from their peak values.
According to CoreLogic's head of research
Tim Lawless, there are stark differences between markets, many of which are not
likely to go away any time soon: "The diversity across regional Australia
is extreme, with drought-affected areas impacting the regional index...
Meanwhile, the regional centres adjacent to the largest capitals, as well as
coastal lifestyle markets, show a stronger performance." Over the quarter,
regional markets have risen by a rather sobering 1.9%, which is much lower than
that national average of 3.0%.
There is some positive news in the regions,
however, with Tasmania's regional markets making up three of the top four
non-capital city markets. "Tasmania's home values have been rising
swiftly, with housing values rising faster across regional Tasmania than
Hobart," said Mr Lawless. Tasmania was the only state where the regions
performed better than the capital, with key lifestyle and agricultural markets
both driving growth.
The current coronavirus pandemic will
obviously have a profound effect on the property market, just like it will on
every other aspect of Australian life. With property assets involving such high
prices and long cycles, however, the impact may be limited compared to the rest
of the economy. While prices will inevitably go down, data released before the
outbreak is beneficial in highlighting the potential response of certain
markets during the recovery period.
Before the coronavirus really took hold,
CommSec's senior economist Ryan Felsman said real estate was looking like an
increasingly attractive investment: "Well, record-low mortgage rates,
rising home prices, strong auction clearance rates, limited housing supply, improving
access to home loans and now financial market volatility are encouraging
Aussies to return to the property market." While it's still very early
days in terms of the pandemic, the market seems to be reacting fairly well so
far.
Positive forces and trends are still
relevant, although certain markets are likely to feel the impacts of the
coronavirus more than others. According to Trent Wiltshire, an economist at
Domain, "A significantly higher unemployment rate would hit the property
market hard. It would have the biggest impact on the Brisbane and Perth
markets, as these markets are most exposed to the Chinese economy." While
all states are likely to experience a slowdown in coming months, many experts
anticipate a strong rebound in second half of the year.