Property prices tumble over the June quarter. How is your city faring?

The coronavirus pandemic and ensuing economic downturn have been threatening to topple housing prices for months now. While the property market has proven to be quite resilient so far, new research from Domain suggests the cracks are beginning to show. 

According to the report, Australian house prices fell by 2% and unit prices by 2.2% over the June quarter, the first quarter to show the impact of COVID-19. All capital cities saw drops in unit prices, while house prices fell everywhere except Adelaide, Canberra and Hobart.

Domain Senior Research Analyst, Dr Nicola Powell said improved affordability, along with the rollout of a number of government incentives, has seen buyer interest recover after falling off a cliff in April. 

“The outlook for residential property has improved vastly in recent weeks. Sentiment towards housing and the purchase of a home has bucked the overall more negative sentiment around the broader economy,” she said.

June quarter property price changes

CityHouse pricesUnit prices
Sydney-2.0%-1.9%
Melbourne-3.5%-1.7%
Brisbane-1.4%-4.1%
Adelaide+0.2%-2.9%
Perth-1.5%-4.9%
Hobart+1.4%-1.5%
Canberra+4.1%-1.3%
Darwin-1.0%-3.7%

Of all the capital cities, Melbourne recorded the steepest drop over the quarter. While it looked set to stabilise in recent weeks, the Melbourne property market is likely to stall following the reintroduction of lockdown measures to contain the second wave of COVID-19 infections.

Sydney also saw declines, with house prices in the harbour city down by almost $23,000 and unit prices down by just over $14,000. Currently, house prices are $110,000 above the early 2019 trough but still $55,000 below their peak in mid-2017.

Only three capital cities managed to buck the overall trend and record a lift in house values. In Adelaide, house prices increased by 0.2% over the June quarter, bringing the median price to a record high of $553,036. 

The Canberra property market, buoyed by a strong public sector employment base and relative success containing the virus, also saw house prices increase by 4.1% over the quarter - making it the best performing of all capital cities.

“The strong quarterly growth pushed median house values to a record high, breaking the $800,000 mark. This is also the first time Canberra house prices have pushed above the median value of the combined capitals since 2013,” said Powell.

Meanwhile, Hobart house prices rose 1.4%, despite concerns about knock-on effects from a hard-hit tourism industry. Powell points out that this is the first time house prices in Hobart have exceeded those in Perth and Darwin. 

“House prices are 57.3% and units 70% higher than five years ago, providing home owners and investors the strongest capital growth of all the major capitals during this time,” said Powell.

All told, record low interest rates, unprecedented government stimulus and pauses to mortgage payments have kept urgent or distressed sales to a minimum so far, but Powell cautions that there’s still plenty of uncertainty ahead.

“While lenders have extended the mortgage pause for those under serious financial strain and the JobKeeper subsidy will be extended and tapered until the end of March next year, the outlook for prices largely depends upon how well the economy is tracking at the time stimulus ends,” she said.

For information about home loan trends, visit our home loan statistics page. And for a look at where rates currently sit, browse our home loans comparison page.

Home loan comparisons on Mozo - last updated 4 March 2024

Search promoted home loans below or do a full Mozo database search. Advertiser disclosure
  • Mozo Expert Choice Badge
    Home Fixed Rate

    Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    5.80% p.a.
    fixed 3 years
    5.91% p.a.

    Enjoy the security of a competitive fixed interest rate from Up. No application, monthly, annual, redraw, or discharge fees to pay. Up to 50 free offset accounts available. Up home loans are only available to owner-occupiers buying or refinancing in major Australian cities. Up is 100% owned by Bendigo Bank. New joiners get $10 by signing up to the app using code UPHOMEMOZO. (T&Cs apply). Mozo Experts Choice award winner.

    Compare
    Details
  • Straight Up

    Obliterate, Owner Occupier, Principal & Interest, <50% LVR

    interest rate
    comparison rate
    Initial monthly repayment
    6.24% p.a. variable
    6.24% p.a.

    Get a low variable rate depending on your deposit with Athena’s Straight Up Variable Home Loan. AcceleRATES feature helps you to reduce your home loan even faster (T&Cs apply). Zero fees to pay. Free redraw facility. Handy mobile app to manage your home loan.

    Compare
    Details
  • Offset Home Loan

    Package, Owner Occupier, LVR<60%, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    6.15% p.a. variable
    6.40% p.a.

    Ability to open up to 10 offset accounts per loan account. Fast online application. Linked Debit Mastercard® with fee-free access at ATMs across Australia. Package a credit card with your home loan and the annual card fee will be waived (T&Cs apply). 40% deposit required.

    Compare
    Details

* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

** Initial monthly repayment figures are estimates only, based on the advertised rate. You can change the loan amount and term in the input boxes at the top of this table. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

^See information about the Mozo Experts Choice Home Loan Awards

Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.

While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.