Property values have surpassed pre-Covid levels, says CoreLogic

Housing values are up by 1% over the course of January and have surpassed pre-Covid levels, according to recent figures from property researcher CoreLogic. 

The researcher also found every capital city recorded a rise in housing value, ranging from 2.3% in Darwin down to 0.4% in both Sydney and Melbourne during January. 

Regional housing values in particular increased by more than twice compared to capital city housing, which could be due to the high volume of buyers flocking to these areas during the height of the Covid-19 pandemic. 

“Internal migration data shows more people are leaving Sydney and Melbourne for regional areas, resulting in a transition of activity from the metro regions to the outer fringe and regional markets,” said CoreLogic’s research director, Tim Lawless. 

While regional areas are getting a boost, Lawless said that drastically reduced international migration has also meant metropolitan areas are lagging behind. 

“This demographic trend is further compounded by the demand shock of stalled overseas migration,” he said. “As Melbourne and Sydney historically receive the vast majority of overseas migrants, these metro areas have been the hardest hit by this demand shock.”

CoreLogic also found that houses are still outperforming units, rising in value by 3.5% in the last six months, while units remain unchanged. 

“Demand for units has diminished through COVID-19 amidst record low levels of investor participation and changing living preferences. While demand and supply remain imbalanced we are likely to see units continue to underperform relative to detached housing markets,” said Lawless.

Home buying up with hopes market will ‘bounce back’

Despite the fact that housing value figures are continuing to climb, it doesn’t look like it’s slowing down Aussies buyers. 

In fact, CoreLogic says the number of mortgage related valuations is already 27% higher than it was a year ago. 

“If this trend persists, the rapid rate of absorption is likely to keep overall stock levels low resulting in further upwards pressure on housing prices,” said Lawless.

Similar research by ME Bank from its latest Quarterly Property Sentiment Report revealed that 77% of Aussies say they ’expect to see property prices bounce back’ this year, with 54% of property owners and buyers predicting ‘prices will go up’ over the next 12 months. 

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