House Prices ‘Falling, Not Crashing’: SQM
There were 41,819 Melbourne properties listed for sale just before Victoria entered a six-week lockdown, up 20 per cent on last year.
According to SQM Research's monthly listings report, July was up 5.9 per cent on June and 20 per cent on July 2019.
There are almost 10,000 more listings in Melbourne compared to Sydney, which is up 10.7 per cent on last year, and Brisbane, which is down -1.7 per cent on last year.
The SQM data also showed overall national listings increased in July by 3.8 per cent from June 2020 but are down -1.2 per cent compared to last year.
Total property listings
| City | July 2020 | Monthly Change | Yearly Change |
|---|---|---|---|
| Melbourne | 41,819 | 5.9% (39,494) | 20.7% (34,646) |
| Sydney | 32,165 | 8.7% (29,590) | 10.7% (29,055) |
| Brisbane | 30,500 | 5.9% (28,814) | -1.7% (31,038) |
| Perth | 22,525 | 3.2% | -9.1% |
| Adelaide | 15,108 | 2.4% | -4.8% |
| Canberra | 4,166 | 6.4% | -1.4% |
| Hobart | 1,966 | 1.0% | -10.0% |
| Darwin | 1,544 | -1.4% | -21.4% |
| National | 312,680 | 3.8% | -1.2% |
^ Source: SQM Research
SQM managing director Louis Christopher said this result was normally associated with a weakening market and no question, that was happening in the two largest cities.
“It is somewhat abnormal to record a rise in listings during the winter months—normally, falls are recorded,” Christopher said.
“This could have been generated by the lifting in restrictions over May and June, enticing sellers to the market.”
Christopher said at the moment dwelling prices were falling, “not crashing to date, per se”.
“In light of the unprecedented restrictions placed in Melbourne, our expectations are that more price falls can be expected in coming months,” Christopher said.
“Outside the two capital cities, the market is more balanced and indeed we are seeing an increase in demand for housing across regional Australia.”
This sentiment was reflected in a consumer confidence survey by insurer Budget Direct which found 60.52 per cent of people predicted property prices would fall up to 20 per cent between April and September.
The survey conducted prior to the Melbourne lockdowns found similar results for all capitals, with the exception of the Northern Territory where respondents expected prices would stay the same.
Consumer property price predictions during Covid-19
^ Source: Budget Direct
According to Corelogic data, house prices have fallen for three consecutive months, dropping -1.6 per cent in the quarter—however, house prices were still up 7.1 per cent for the year.
CommSec senior economist Ryan Felsman said although the Corelogic data is heavily skewed towards the major cities, regional data buffered the results.
“But virus uncertainty, less appetite to take on more mortgage debt, rising unemployment, lower household incomes, lower inbound migration, elevated rental vacancies and the eventual removal of policy support could weigh on property prices over coming months,” Felsman said.
