Recovery underway for dwelling prices

By Gerv Tacadena | 03 Nov 2020

Australian dwelling prices have started to recover eight months since the onset of the COVID-19 pandemic, with all capital cities except Melbourne posting gains in October, according to the latest market update from CoreLogic.

The median dwelling price hit positive territory in October, rising by 0.4%. Adelaide and Darwin were the strongest performers during the month, recording price gains of 1.2%.

Of all capital cities, only Melbourne remained in the red, with a price decline of 0.2%. The drop in the city's house prices however, has been easing since mid-September, with the latest being the smallest month-on-month drop since April.

Tim Lawless, head of research at CoreLogic, said since the restrictions on private homes and auctions were lifted across Melbourne, new property listings have surged and clearance rates have started to improve. These reflect that buyer activity is recovering.

"Based on this recent trend in housing values and activity, it seems likely we will see Melbourne follow the other capital cities towards a recovery over the coming month," he said.

Lawless said detached homes remained the bigger driver of price gains. Over the month, house values went up by 0.4%, offsetting the 0.2% decline in unit values.

While unit values have shown smaller declines in values than houses through the COVID-19 period so far, Lawless said things are likely to change as the unit segment is more exposed to the impacts of the outbreak. This is particularly true in the key inner-city precincts of Melbourne and Sydney.

"These areas have a higher concentration of unit stock, and historic exposure to demand from overseas migration. 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 under-perform relative to houses over the medium term," he said.

Regional areas continue to outperform capital cities during the COVID-19 outbreak. In fact, regional dwelling values have increased by 1.7% while values across the combined capitals index have fallen by 2.3% in the seven months since March.

"The newfound popularity of working from home is only one factor helping to support regional home prices. More affordable price points, lower densities and lifestyle factors, are also under-pinning the relative strength across many regional areas of the country," Lawless said.

House prices across capital cities are starting to recover.

Top Suburbs : tweed heads south , emerald , st marys , collingwood , kariong


Get help with your investment property

Do you need help finding the right loan for your investment?

When investing in property, it is important to make sure that you not only have the lowest available rate that you can get, but also have the correct loan features for your needs.

Just fill in a few details below and we'll then arrange for a local mortgage broker to contact you and work out what features or types of loans are right for your needs. We'll even help with the paperwork. Plus an appointment is free.

How soon would you like a mortgage?
What is your Annual Household Income i $
Do you currently own any Investment Properties?
Do you own your own residence?
How much equity do you have in all your current properties?
First Name
Last Name
Where do you live?
What number can we reach you on?
E-mail address
We value your privacy and treat all your information seriously - you can check out our privacy policy here