House prices continue falling (slowly) across Australia
July's CoreLogic data shows a nationwide drop of 0.6% in the third straight month of price declines in most Australian capitals.
The Australian property market continued a slow downward trend in July, led by poorer performance in Melbourne (down 1.2%) and Sydney (down 0.9%).
Prices also fell to a lesser degree in Brisbane (down 0.4%), Hobart (down 0.2%), Perth (down 0.6%) and Darwin (down 0.3%). Of Australia's capitals, only Adelaide and Canberra saw positive price growth, at 0.1% and 0.6% respectively.
The data, released today in CoreLogic's monthly Hedonic Home Value Index, marks the third straight month of nationwide price falls. July's 0.6% nationwide fall is slightly lower than June's 0.7% drop.
While values fell in regional Victoria (down 0.5%) and Western Australia (down 3.2%), overall values in regional Australia remain unchanged from June. This is a stronger showing than the combined capital cities value, which fell 0.8%.
A drop in Australian property prices is unsurprising as COVID-19 continues to impact just about every aspect of life around the world. Unemployment hit 7.4% in June and last night Melbourne went into stage 4 restrictions.
Compared to many sectors of the economy the property market could be doing a lot worse. "The impact from COVID-19 on housing values has been orderly to-date," said CoreLogic head of research Tim Lawless.
"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."
Activity has increased too, with newly advertised property listings up 46% from the lowest point in May when property inspections were limited to appointment only and auctions were taken online. Real estate agent activity is back where it was this time last year.
But the future outlook for the property market is far from sunny. Lawless said that "Urgent sales are likely to become more common" as higher government support payments and mortgage repayment holidays come to an end.
And restrictions on real estate transactions have been reimposed not just in Melbourne but, from Wednesday, the entire state of Victoria. If more cities face a Melbournian-style second wave then property prices could fall even further.
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