Australian housing values racked up a third consecutive month of declines in July, with CoreLogic’s home value index dropping 0.6% over the month, a slight improvement from June when the national series was down 0.7%.
Across the capital cities, only Canberra (+0.6%) and Adelaide (+0.1%) posted a rise in dwelling values over the month, while Melbourne (-1.2%) and Sydney (-0.9%) led the decline, recording the largest month-on-month falls in July.
Regional markets are generally showing more resilience to falling values. Across the combined regional areas, housing values were unchanged in July compared with a 0.8% fall across the combined capital cities index. Regional Victoria (-0.5%) and regional Western Australia (-3.2%) were the only non-capital city markets to record a fall in values over the month.
According to CoreLogic’s head of research, Tim Lawless, housing markets have remained relatively resilient through the COVID period so far. “The impact from COVID-19 on housing values has been orderly to-date, with CoreLogic’s national index falling only 1.6% since the recent high in April and housing turnover has recovered quickly after it’s sharp fall in late March and April.”
“Record low interest rates, government support and loan repayment holidays for distressed borrowers have helped to insulate the housing market from a more significant downturn. Advertised supply levels have remained tight, with the total number of properties for sale falling a further 4.3% in the 4 weeks to July 27th, sitting 15.2% below where they were this time last year. Additionally, increased demand driven by housing specific incentives from both federal and state governments, especially for first home buyers, have become more substantial.”
However, with fiscal support set to taper from October and repayment holidays expiring at the end of March next year, Mr Lawless believes the medium term outlook remains skewed to the downside.
“Urgent sales are likely to become more common as we approach these milestones, which will test the market’s resilience. Similarly, the recent concerns of a second wave of the virus and the potential for renewed border closures and stricter social distancing polices are likely to further push consumer sentiment down. This is likely to weigh on both home buying and selling activity more broadly.”