- Australia’s house prices fell -0.4% in May, according to CoreLogic
- Five of Australia’s eight capital cities saw price declines
- Home price declines less than experts had predicted
The COVID-19 pandemic has seeped into all corners of the world including Australia. Though the toll of the pandemic has been mild compared to that of the US (confirmed cases of 7,227 compared to the US’s 1.9M and 102 deaths compared to 109,000 deaths in the US), the coronavirus was felt by Australia’s home prices in May.
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For the first time since June 2019, home prices in Australia fell -0.4%, according to CoreLogic. CoreLogic’s head of research, Tim Lawless, said, “Considering the weak economic conditions associated with the (coronavirus) pandemic, a fall of less than half a percent in housing values over the month (May) shows the market has remained resilient to a material correction.”
Five of Australia’s eight capital cities experienced home price declines in May. Darwin was hit the hardest with a -1.6% decline followed by Melbourne with a -0.9% decline in dwelling values.
CoreLogic found some good news in Australia’s property market in May amid this price decline. The number of home sales rebounded by +18.5% in May after falling -33% in April. Additionally, the ANZ Roy Morgan weekly consumer confidence index has been rising for the past eight consecutive weeks. Sidebar improvements in listing numbers and auction market action also registered in May.
Lawless gave his stamp of approval to both increasing sales numbers and consumer confidence levels by saying, “With consumers feeling more confident, households are better equipped to make high commitment decisions such as buying or selling a home. A lift in housing market activity should also support broader economic activity, with housing turnover providing positive flow-on effects to other sectors including retail, construction and banking.”
Those looking for high-end properties in Australia ought to find “bargains” as the most expensive home prices in Melbourne dropped -1.3% in May m/m and those in Sydney declined -0.6% m/m. Still, compared to one year ago, Melbourne’s most expensive home property values increased +13.9% and Sydney’s increased +16.5%.
The long-term view of Australia’s housing market, like America’s, is awash with uncertainty. CoreLogic’s Lawless said, “In the absence of these policies (government stimulus payments and repayment deferrals that will expire), housing values could come under some additional downward pressure if economic conditions haven’t picked up towards the end of the year.”
Thanks to Yahoo Finance Australia and Wikipedia.