The Urban Developer
AdvertiseEventsWebinars
Urbanity
Awards
Sign In
Membership
Latest
Menu
Location
Sector
Category
Content
Type
Newsletters
PURPOSE-BUILT STUDENT ACCOMMODATION SUMMIT ONE WEEK LEFT TO REGISTER
THE FUTURE OF PBSA IN AUSTRALIA EXPLORED NEXT WEEK AT OUR SUMMIT
REGISTER NOWDETAILS
TheUrbanDeveloper
Follow
About
About Us
Membership
Awards
Events
Webinars
Listings
Resources
Terms & Conditions
Commenting Policy
Privacy Policy
Republishing Guidelines
Editorial Charter
Complaints Handling Policy
Contact
General Enquiries
Advertise
Contribution Enquiry
Project Submission
Membership Enquiry
Newsletter
Stay up to date and with the latest news, projects, deals and features.
Subscribe
OtherTed TabetMon 02 Nov 20

Property Prices Make a Comeback

TUD+ MEMBER CONTENT
f517d150-ea8e-4d97-9eaf-60bf2bc030f5
SHARE
9
print
Print

Australian home values have officially increased for the first time since the coronavirus-induced correction started, with the nation’s housing market up 0.4 per cent in October.

According to Corelogic’s latest hedonic home value index, prices were higher in seven of the eight capital cities, with capital city markets lifting by 0.2 per cent across October to be up 3.7 per cent over the year.

The nation’s smaller capital cities have continued to “nudge back” as government support for buyers and record-low interest rates boosted confidence and demand.

Dwelling values increased by more than 1 per cent in each of the smallest four capital cities, which have remained more resilient than other cities during the downturn, with prices in Brisbane, Adelaide, Hobart and Canberra reaching new record highs.

Every capital city saw a slight gain, except for embattled Melbourne, where the rate of decline has continued to slow.

Despite the data showing price falls in Melbourne, the drop of 0.2 per cent marked the smallest month-on-month drop in values since the onset of the pandemic, buoyed by reinstated open-home inspections driving new listings and clearance rates.

Change in dwelling values

RegionMonthQuarterAnnualTotal returnMedian value
Sydney0.1%-0.6%6.1%8.8%$860,955
Melbourne-0.2%-2.2%0.7%4.1%$666,240
Brisbane0.5%0.9%3.5%7.5%$510,353
Adelaide1.2%2.0%4.4%8.5%$455,425
Perth0.6%0.9%0.0%4.3%$456,267
Hobart1.0%1.6%6.5%11.9%$498,073
Darwin1.2%3.9%2.8%9.4%$398,910
Canberra1.0%1.9%6.8%11.8%$656,739
National0.4%-0.1%3.9%7.6%$559,254

^ Source: CoreLogic's Hedonic Index

The data comes ahead of the Reserve Bank's Tuesday meeting, which the market expects will cut the cash rate to 0.1 per cent, down from the already historic low of 0.25 per cent.

Corelogic head of research Tim Lawless said housing markets were responding to the stimulus of low mortgage rates and improved sentiment.

“Consumer confidence has consistently improved since the virus curve has once again flattened and Australians respond positively to measures announced in the federal budget,” Lawless said.

“In October we saw an 11.9 per cent surge in the Westpac-Melbourne Institute consumer sentiment index, rising clearance rates and an increase in valuation for purchase orders.

“Alongside this, we are seeing persistently low advertised stock, which has supported price growth.”

The rise in capital city housing values over the month was attributable to a 0.4 per cent lift in house values which offset the 0.2 per cent fall in unit values.

“Through the Covid period so far, unit values have actually shown a smaller decline in values than houses, but this is likely to change,” Lawless said.

“Low levels of investment activity, relatively high supply of unit stock in inner-cities and international border closures are key factors that imply units will underperform relative to houses over the medium term.”

▲ Prices have hit all-time highs in seven NSW regions, six Queensland regions, four South Australian regions and three Tasmanian regions.


The rise of the regions

Remote working initiatives have continued to drive regional housing markets, which have continued to outperform the capital cities, with major regional cities within two hours' commuting distance of their central business district.

In the seven months since March, regional dwelling values are up 1.7 per cent while values across the combined capitals index have fallen by 2.3 per cent.

In Queensland, the Gold and Sunshine Coasts have become even more desirable for prospective homeowners with strong appetite for housing close to the coast itself and low supply has pushed up housing values.

Encouragingly, the easing of government restrictions in regional Victoria saw dwelling prices lift 1.5 per cent in North-West Victoria, 1.3 per cent in Bendigo, 0.9 per cent in Warrnambool & South-West Victoria and 0.8 per cent in Geelong.

“The newfound popularity of working from home is only one factor helping to support regional home prices,” Lawless said.

“More affordable price points, lower densities and lifestyle factors, are also under-pinning the relative strength across many regional areas of the country.”

Nationally, markets are now expected to pass through a trough across the first quarter of next year as government income support schemes and mortgage repayment moratoriums are eased, leading to an increase in defaults and distressed sales.

“Reopening, government incentives, low rates, and the escape from the city are dominating at present,” AMP Capital chief economist Shane Oliver said.

“[However] the hit to immigration, weak rental markets and high unemployment will weigh into next year, especially in inner-city Melbourne and Sydney, while houses in the outer regions and other cities will likely remain much stronger.”


ResidentialAustraliaReal EstateSector
AUTHOR
Ted Tabet
The Urban Developer - Journalist
More articles by this author
website iconlinkedin icon
ADVERTISEMENT
TOP STORIES
Exclusive

Launching Queensland’s Future: The Man Guiding the Million-Home Plan

Phil Bartsch
9 Min
Singapore Smart City AI hero
Exclusive

AI Gaining Pace But ‘You Cannot Synthesise Soul’

Clare Burnett
6 Min
Scape PBSA Kingsford EDM
Exclusive

It Takes More Than a Room: PBSA Evolves to Meet Student Demands

Clare Burnett
7 Min
Exclusive

Soheil Abedian: What’s Driven the Man Who’s Transformed a City

Phil Bartsch
7 Min
Exclusive

Robots Not a Miracle Cure for Housing Productivity Crisis

Vanessa Croll
6 Min
View All >
Rhodes Billbergia EDM
Residential

Billbergia Moves Nine-Tower Inner-West Masterplan Ahead

Clare Burnett
Port Adelaide Distribution Centre
Industrial

Centuria Pays Record $216m for Quintessential’s Port Adelaide Logistics Asset

The City of Melbourne has seen retail vacancy rates plummet across the CBD.
Retail

Melbourne CBD Retail Vacancy Rate Plummets

Marisa Wikramanayake
After fears that retail in the CBD would not survive as the office sector tumbled, vacancy rates have dropped significan…
LATEST
Rhodes Billbergia EDM
Residential

Billbergia Moves Nine-Tower Inner-West Masterplan Ahead

Clare Burnett
3 Min
Port Adelaide Distribution Centre
Industrial

Centuria Pays Record $216m for Quintessential’s Port Adelaide Logistics Asset

3 Min
The City of Melbourne has seen retail vacancy rates plummet across the CBD.
Retail

Melbourne CBD Retail Vacancy Rate Plummets

Marisa Wikramanayake
2 Min
Retail

Corimbia Capital’s Debut Breaks Ground at Kirrawee

Taryn Paris
2 Min
View All >
ADVERTISEMENT
Article originally posted at: https://www.theurbandeveloper.com/articles/house-prices-rise