06 Apr Property market update
March saw property prices track upwards by 0.7% nationally and by 0.5% in Perth. The impact of coronavirus is starting to show but most capital cities managed an increase on last month with the exception of Hobart.
Nationally the impact of coronavirus seems to have slowed growth with March registering the lowest monthly gain since the market lifted in July last year, property data analysts CoreLogic said.
It’s expected that the new social distancing measures, the rise in unemployment and poor consumer confidence will impact values significantly over the next quarter, with some economic commentators anticipating up to a 20% reduction nationally.
CoreLogic head of research Tim Lawless said a period of “unprecedented uncertainty” could drag Australia’s economy into a recession for the first time in almost 30 years, which would see activity, and eventually house prices, plunge.
He said the global financial crisis was short and sharp, but coronavirus had already hurt consumer confidence more than it had during the 2008 crisis, and its overall impact could be more damaging.
“It’s the sheer uncertainty of a health-related crisis, rather than an economic one, or a financial catalyst, that’s the big difference here,” he said.
Noting the Federal Government’s financial stimulus is a positive, he doesn’t anticipate that it will reduce the surge in unemployment.
Mr Lawless has also warned of a lessening in market activity with a substantial reduction in listings with the impact of the ban on auction gatherings and open houses forcing a change to real estate agent practices.
Mr Lawless said real estate agent reports generated across CoreLogic platforms, used by about 70 per cent of real estate agents for their research and pre-listing reports, have more than halved over recent weeks.
“Similarly, recent polling of real estate agency enquiry levels indicated that more than 60 per cent of Australian real estate agents have seen buyer and seller enquiries fall by more than 50 per cent over recent weeks, with the larger majority expecting a further drop in enquiry over coming weeks,” he said.
Sydney had the highest growth over the quarter with values up 3.9 per cent, followed by Melbourne at 2.9 per cent and Canberra at 1.7 per cent. Closer to home Perth recorderd a 0.5% increase.
Perth’s 0.5% increase assisted in a quarterly increase of 0.9% and curtailed the annual decrease to -3.9% with the average dwelling price of $445,614.
Information above is taken from the CoreLogic Hedonic Value Index, more information can be found at: https://www.corelogic.com.au/news/housing-values-continued-rise-march-conditions-expected-cool-over-comings-months-buyers-and?utm_source=newsletter&utm_medium=email&utm_campaign=2020401%20Hedonic%20Home%20Value%20Index