Housing prices down 0.7% nationally, 0.8% in capital cities
The coronavirus pandemic continues to chip away at property prices, with the CoreLogic Home Value Index recording a decline of 0.7% in June - the second month in a row it's seen prices drop.
Among capital cities, dwelling values fell by 0.8% over the month, led by both Melbourne (-1.1%) and Perth (-1.1%). Sydney saw the third largest decline, with prices down by 0.8%.
Adelaide and Brisbane were relatively spared, recording price drops of just 0.2% and 0.4%, respectively. Meanwhile, indices for Hobart, Darwin and Canberra showed slight increases of between 0.1% and 0.3%.
CoreLogic head of research Tim Lawless said the impact of the coronavirus pandemic on property prices has so far been mild, and year-on-year growth remains strong for most capital cities.
“The twelve month change in home values remains in positive double digit territory across Sydney (13.3%) and Melbourne (10.2%),” he said.
“The only capitals where values show declines on an annual basis are Perth and Darwin, but even across these cities, home values were early into a recovery phase pre-COVID."
Market activity has also picked up after coming to a near standstill back in April. After recording a 21.5% spike in home sales in May, CoreLogic reports home sales continued to increase by 29.5% in June.
While it may seem that the property market hasn’t succumbed to the shocks that have plagued other industries, Lawless reminds Australians of the multiple stimulus measures that have been deployed to prop it up.
“A variety of factors have helped to protect home values from more significant declines, including persistently low advertised stock levels and significant government stimulus,” he said.
“Additionally, low interest rates and forbearance policies from lenders have helped to keep urgent sales off the market, providing further insulation to housing values.”
However, the economic outlook for the rest of the year remains uncertain, and we might be looking at a very different picture when the flow of support to mortgage holders runs out in September.
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“While it is encouraging to see lenders have recently hinted at an extension in their repayment leniency policies, the government stimulus will eventually taper and banks will require borrowers to repay their loans,” Lawless said.
“The longer term outlook for the housing market is largely dependent on how well the economy is tracking when these support measures are removed.”
If your job is secure and you’re looking to take advantage of dipping prices, browse our guide to making your property move during lockdown for tips. And if you’d like to compare loans, visit our home loan comparison page for more information.
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