- Property prices continue to decline, with national falls of around 2% over the three months to July.
- More than $30,000 was wiped off Melbourne house prices, while apartments nationwide dropped lower.
- Domain senior research analyst Nicola Powell said the coronavirus had reversed the price recovery that had been in full swing since last year.
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Melbourne house prices have dropped $30,000 in just three months, as the coronavirus sends real estate into a spin.
It wasn’t alone, with not one capital city market spared over the last three months, according to the latest Domain figures.
“Nationally house prices have dropped by 2% and unit prices by 2.2% over the June quarter,” senior analyst Nicola Powell said.
The falls come in spite of substantial support offered by the federal government to safeguard jobs and incomes in the face of the coronavirus crisis.
“The falls have been minimal to-date as unprecedented government stimulus, mortgage holidays, low stock levels and record low-interest rates shield values from any significant declines, helping to retain stability in the housing market,” Powell said.
Unsurprisingly, Melbourne, facing rising transmission rates, has led national values lower.
“Melbourne’s record high house price achieved last quarter was short-lived [as] prices tumbled 3.5% over the June quarter. House values have fallen $32,000 and units $9,000 over the first quarter to show the impact of COVID-19,” Powell said.
It’s been the inner east and inner south where those falls have been concentrated as affordability comes under the microscope, while outer residential areas have largely been inoculated so far.
With a second Victorian lockdown only commencing at the beginning of July, and therefore not being included in these latest figures, there could be even more to come as it stalls what had been returning upwards momentum.
Sydney, the country’s largest market, has likewise borne a large amount of the fallout, where house and unit prices fell around 2% apiece. With sellers increasingly discounting to lock in buyers, the market hardly looks like turning around, Powell warns.
“In June, 15.2% of sellers reduced asking prices, three times higher than the same time last year. The proportion of properties discounted is a leading indicator of price movement, evidence that further price weakness lies ahead,” she said.
Contrast that with the ACT, where house prices have roared 4.1% higher over the last three months, along with 1.4% in Hobart, and a slim 0.2% rise in Adelaide. On the other side of the coin, Brisbane and Perth prices have fallen by around 1.5%.
On the apartment side of the equation, Brisbane, Perth and Darwin have all seen prices slashed, with falls of 4.1%, 4.9% and 3.7% respectively.
Still, despite the reversal, prices in many markets are far stronger than they were last year, having mounted a substantial recovery in the interim.
Sydney and Hobart house prices are 10% or more higher than they were 12 months ago, while the Tasmanian capital’s unit market remains up an astounding 17.3%.
All that being said, a bounce doesn’t look ready to appear just yet as anxieties over the virus and government support loom large.
The free fall might have some way to go yet.