THE DEVIL IS IN THE DETAIL
First National Real Estate Neilson Partners say the latest CoreLogic house price data shows the devil is in the detail when it comes to housing market statistics during COVID-19. While the key take-out is that house prices fell 0.7% nationally last month, the statistic is heavily skewed by larger falls happening in Melbourne and Sydney’s luxury suburbs.
Prices declined marginally across five capital cities but actually increased in three. Melbourne, Sydney, Brisbane, Adelaide & Perth saw minor value falls, whereas Hobart, Canberra and Darwin each rose subtly. By any measure, the movements were small and, when considering the 12-month change in home values, they in fact reflect double-digit growth. Melbourne and Sydney, which are considered barometers for the national housing market, finished the financial year up by 10.2% and 13.3% respectively.
First National Real Estate Neilson Partners say if you contrast this with the upper quartile in Melbourne and Sydney, it’s evident where the real market shifts are occurring.
‘In Melbourne Malvern fell 4.8% and in Sydney, Mosman fell 2.5% so when you calculate a national average for house prices, the result is skewed in a way that makes it look worse than it really is. For Australians looking to buy homes in low to middle price ranges, there’s been very little change as a result of the Coronavirus pandemic’.
‘Looking at the most affordable quartile. In Melbourne, the decline was 0.5% for the month of June, or $1,373 down from the June median and Sydney’s homes actually increased by 0.2%, or $1,770 at the June median price. Considering the expert economist pandemic March predictions of 30% declines, Australia’s housing market is demonstrating resilience and a very different trajectory’.
While some homeowners are worried about what will happen when government assistance and bank forbearance policies are intended to be wound-back in September, imagining that the government will not adapt or extend its assistance, if considered critical, would be inconsistent with its management of the COVID-19 crisis thus far.
Based on levels of pre-listing activity across the First National Real Estate network, housing stocks look set to increase in spring but job security and overall economic confidence will be the deciding factor in what happens with home values in the final months of 2020.