CoreLogic’s Property Market Update October 2020
House prices have fallen nationally over September but rose everywhere except the two big markets of Melbourne and Sydney.
- National prices fell 0.1 per cent, but the only price declines recorded were for Melbourne (-0.9pc) and Sydney (-0.3pc)
- CoreLogic’s Eliza Owen says ultra-low interest rates and improving consumer sentiment seems to be starting a rebound in property prices
- Regional areas are generally seeing solid demand, with both prices and rents rising
CoreLogic’s national home price index showed a 0.1 per cent fall last month, but that was entirely driven by a 0.9 per cent slide in Melbourne and a 0.3 per cent decline in Sydney.
“That speaks to some of the affordability constraints across these cities, compounded by the job loss and income loss that we’ve seen through COVID-19, as well as the fact that those cities have more exposure to overseas migration,” CoreLogic’s head of research for Australia Eliza Owen said of the falls in the two largest capitals.
Outside those two big cities, the other capitals posted increases, as did most markets outside the metropolitan areas.
However, Sydney and Melbourne account for around 40 per cent of the nation’s homes and more than half the home values, meaning their declines pulled the overall index slightly lower.
Falling values in Melbourne and Sydney, which make up approximately 40% of Australia’s housing stock by number and 55% by value, pushed the national reading into a fifth straight month of decline.
In Melbourne, auction volumes remain low with a 59% clearance rate, demonstrating the impact the current lockdown has on activity.
According to CoreLogic’s head of research, Tim Lawless, Melbourne remains the main drag on the headline results.
Since peaking in March, Melbourne’s values are down 5.5%. With restrictions starting to lift and private home inspections once again permitted, we expect to see activity lift in October.”
Mr Lawless believes the resilience in regional values can be attributed to a number of factors. “From a cyclical perspective, regional areas weren’t recording the same growth conditions pre-COVID, so home values in these markets are often more affordable, and don’t have a high base to fall from. Anecdotally we are also observing a transition of demand away from the cities towards the major regional centres, particularly those that are adjacent to the larger capitals where residents can commute back to the cities if required. Remote working arrangements are no doubt a factor in supporting demand in these markets, but lifestyle opportunities and a desire for lower density housing options are also playing a part.”
Demand from pent-up buyers in Melbourne looking to upgrade, relocate, or buy a holiday home on the Peninsula is strengthing, yet listings are not yet being actioned to meet the increased buyer demand, which put upwards pressure on prices and kept many buyers waiting on the side-lines.
Be ready to take advantage of opportunities as they arise, which may occur at the tail end of this Stage 4 period.
If you’ve got finances in order and are ready to act quickly, you’ll be ahead of the curve when restrictions are eased, and the masses of buyers return to the market. Now is the perfect time plan for your next move, to avoid rushing into a decision under pressure when opportunities next arise.
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