Invest
Property market dips for second straight month
Falls in national house prices accelerated over the month of June, with the September cliff still looming, new research has shown.
Property market dips for second straight month
Falls in national house prices accelerated over the month of June, with the September cliff still looming, new research has shown.
Following 11 months of gains, dwellings have been reduced by more than a per cent following 0.4 per cent in May before falling a further 0.7 per cent in June.
Melbourne and Perth had the biggest reduction in house prices, falling by 1.1 per cent in June, followed by a 0.8 per cent decrease in Sydney, a 0.4 per cent fall in Brisbane and a drop of 0.2 per cent in Adelaide, according to CoreLogic’s hedonic home value index.
Prices in Hobart and Darwin grew by 0.3 per cent while the nation’s capital Canberra also increased slightly by 0.1 per cent.
However, according to CoreLogic’s head of research, Tim Lawless, this was not enough to move property into positive territory as nationally it fell by 1.3 percent over the past two months.
Despite the falls, Mr Lawless noted that the market is currently being aided by government support and loan deferrals that will run out.
“Another key risk relates to the eventual removal of stimulus measures and borrower repayment holidays. Eventually, the economy and borrowers will need to abide by market forces. This is when we could see a rise in mortgage arrears and the potential for a lift in urgent or forced sales,” he said.
Corelogic’s research also revealed that more expensive properties are seeing the biggest swings during the COVID-19 market correction.
“The past three months has seen this trend playing out, with upper quartile values down 1.7 per cent across the combined capital city index over the past three months, while lower quartile values have fallen by only 0.3 per cent,” Mr Lawless said.
This capital city trend is driven mostly by Sydney and Melbourne, while the smaller cities have shown a mixed result across the valuation cohorts.
In Sydney, the upper quartile is down 1.3 per cent over the past three months, while lower quartile values are up 0.2 per cent. Similarly, over the same period in Melbourne, upper quartile values are down 3.7 per cent, while lower quartile values have declined a more modest 0.5 per cent.
Mr Lawless notes, however, “Importantly, the upper quartile also recorded the most significant run-up in values throughout the second half of last year.”
Despite the economic risks and the market reducing, Mr Lawless also highlighted some green shoots for property investors.
“With real estate agent activity bouncing back, the number of fresh real estate listings has been ramping up since early May. The rolling 28 day count of new listings remained lower than a year ago, but was 42 per cent higher relative to the recent low in early May. While new listings are ramping up, the total listing count has continued to trend lower, indicating a strong rate of absorption,” Mr Lawless explained.
He also noted auctions are showing signs of recovery following the government stopping on-site auctions.
“Auction markets have shown a partial recovery, with the combined capital city clearance rate averaging 59.9 per cent since mid-May. Clearance rates reached a record low of 30.2 per cent through April as a result of the temporary ban of on-site auctions,” Mr Lawless said.
“This saw withdrawal rates peak at 56.0 per cnet, and more than 80 per cent of successful auction sales were negotiated prior to the auction rather than under the hammer. Since late May, as the ban on auctions has lifted, withdrawal rates have tracked around the 10 per cent with the large majority of auctions selling under the hammer rather than before or after the event.”
Did you enjoy this article? You may also be interested in:
- COVID-induced job losses 'less likely' to hit borrowers
- Investors need structured, technology-based approach to data to succeed
- Depreciation deductions 'never needed more' for landlords
About the author
About the author
Property
Millennials believe first home buyers need more support
Australia’s up-and-comers in the housing market say more needs to be done to slow rising house prices. ...Read more
Property
3 in 4 borrowers in trouble are in lockdown: ANZ
Despite offering support, ANZ said freezing home loan repayments will be the last resort, as three in four requests for support stem from NSW. ...Read more
Property
RBA gives APRA’s use of macro tools a tick of approval
Ahead of an expected move to impose tougher lending rules on the banks, the Reserve Bank has looked into previous attempts by APRA to cool the housing market. ...Read more
Property
Federal incentives are driving more first home buyers into the market
While property prices continue to grow, new research suggests that the government’s current crop of first home buyer incentives is having an impact on this segment of the market. ...Read more
Property
Why it now costs 130% more to service a mortgage than 3 decades ago
The lifetime cost of owning a home has increased by over 130 per cent in just three decades, new research has revealed. ...Read more
Property
Using the 30/30/3 rule for home buying during uncertain times
Thinking of buying a home? Uncertain economic times may have you double guessing your purchase, but the 30/30/3 rule can help you make this a reality. ...Read more
Property
Rental yields reach decade high, but not all markets move at the same pace
Changing consumer preferences towards lifestyle destinations and a lack of supply have led to record national price growth, albeit price fluctuations vary region-to-region, fresh figures show. ...Read more
Property
What younger Australians are getting wrong about home loans
As young Australians look to fight the odds and take their first step onto the property ladder, more and more are making easy mistakes. ...Read more
The Olympic effect on property and equity investors; COVID-19 Disaster Payments and super
Listen now
Do lockdowns boost property prices? Are short-sellers levelling the playing field? Did you lodge your tax returns early?
Listen now
Will lockdowns halt the housing boom? Is the metaverse taking over? And the cons of lodging your tax returns early
Listen now
Are you being priced out of the market? Have you got the Tuesday blues? And are you ready for the upcoming super changes?
Listen now
Property
Millennials believe first home buyers need more support
Australia’s up-and-comers in the housing market say more needs to be done to slow rising house prices. ...Read more
Property
3 in 4 borrowers in trouble are in lockdown: ANZ
Despite offering support, ANZ said freezing home loan repayments will be the last resort, as three in four requests for support stem from NSW. ...Read more
Property
RBA gives APRA’s use of macro tools a tick of approval
Ahead of an expected move to impose tougher lending rules on the banks, the Reserve Bank has looked into previous attempts by APRA to cool the housing market. ...Read more
Property
Federal incentives are driving more first home buyers into the market
While property prices continue to grow, new research suggests that the government’s current crop of first home buyer incentives is having an impact on this segment of the market. ...Read more
Property
Why it now costs 130% more to service a mortgage than 3 decades ago
The lifetime cost of owning a home has increased by over 130 per cent in just three decades, new research has revealed. ...Read more
Property
Using the 30/30/3 rule for home buying during uncertain times
Thinking of buying a home? Uncertain economic times may have you double guessing your purchase, but the 30/30/3 rule can help you make this a reality. ...Read more
Property
Rental yields reach decade high, but not all markets move at the same pace
Changing consumer preferences towards lifestyle destinations and a lack of supply have led to record national price growth, albeit price fluctuations vary region-to-region, fresh figures show. ...Read more
Property
What younger Australians are getting wrong about home loans
As young Australians look to fight the odds and take their first step onto the property ladder, more and more are making easy mistakes. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
