Australian house prices have started to recover eight months since the start of the COVID-19 pandemic, with all capitals except Melbourne posting gains in October, according to the latest market update from CoreLogic.
The median house price reached positive territory in October, increasing 0.4%. Adelaide and Darwin were the best performers during the month, registering price increases of 1.2%.
Of all the capitals, only Melbourne remained in the red, with prices falling by 0.2%. However, the decline in house prices in the city has eased since mid-September, with the latest being the smallest monthly drop since April.
Tim Lawless, director of research at CoreLogic, said that since the lifting of restrictions on private homes and auctions in Melbourne, new real estate listings have increased and liquidation rates have started to improve . This shows that buyer activity is picking up.
"Based on this recent trend in housing value and activity, it seems likely that Melbourne will follow other capitals towards a recovery over the next month," he said.
Lawless stated that single-detached homes remained the main driver of price increases. During the month, home values ??rose 0.4%, offsetting the 0.2% drop in unit values.
While unit values ??have so far shown smaller declines in value than homes throughout the COVID-19 period, Lawless said things are likely to change as the market segment Unit is more exposed to the impacts of the epidemic. This is particularly true in the key areas of downtown Melbourne and Sydney.
"These areas have a higher concentration of unit stocks and historical exposure to the demand of overseas migration. Low levels of investment activity, a relatively high supply of Unit stocks in city centers and the closure of international borders are key factors that imply that units underperform compared to homes in the medium term, ”he said.
Regional regions continue to outperform capitals during the COVID-19 outbreak. In fact, the value of regional homes rose 1.7%, while the combined capital index values ??fell 2.3% in the seven months since March.
“The new popularity of working from home is just one of the factors helping to support regional housing prices. More affordable prices, lower densities and lifestyle factors also underpin relative strength in many parts of the country ”. Lawless said.
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