Low registrations reinforce housing stability

The drop in prices due to the COVID-19 pandemic is not as "dramatic" as some market watchers have predicted, indicating stable conditions in the housing market, report says from the Real Estate Institute of Australia.

The median home price in capital cities fell only 2.2% to $ 770,359 in the June quarter, according to REIA's Real Estate Market Facts report. This is the first quarterly drop since March 2019. On an annual basis, house prices in capital cities remained high, up 5.9%.

"While there has been an impact on pricing, it's relatively modest and certainly hasn't been the doomsday prophecies some commentators have expected. The impact is not having an impact. Nor has it been uniform across Australia, with varying local market conditions resulting in a range of results, "said Adrian Kelly, president of REIA.

Kelly said that the drop in the number of listings for sale had helped isolate the potential drop in prices.

"In all capital cities except Perth, the number of homes and other accommodation for sale declined from the June quarter of 2019. The largest declines were in Hobart, where the number of homes for sale has decreased by 33% and the number of other homes by 26%, "he said.

The decline in enrollment continued into August. The latest figures from SQM Research showed a 6.3% monthly drop in real estate listings during the month. This drop is due to a "somewhat abnormal" rise of 3.8% in July.

Kelly said government initiatives had also helped build confidence among buyers and sellers of properties, which resulted in improved market conditions.

"The market is holding up better than many expected with the government initiatives of JobKeeper and JobSeeker as well as loan deferrals from banks playing their role in stabilizing the situation. With the extensions announced, we expect continued stability in the market. market, ”he said.

A similar study by Knight Frank found that home prices in Australian markets rose 6.1% in the 12 months ending in late June. In the first six months of 2020, prices have fallen by only 0.4%. This has helped Australia move up 37 places in the global ranking of real estate market performance.

"Australia has handled the COVID-19 pandemic better than some other countries and territories around the world, with the duration and severity of the lockdown not being as strong, which is part of its performance. stable, ”said Michelle Ciesielski, Residential Research Manager for Australia at Knight Frank.

Sarah Megginson, editor-in-chief of Your Investment Property, Your Mortgage, and Australian Broker, said the apocalyptic forecast for house prices was unlikely.

"Our government will not allow real estate prices to collapse by 40%. They will step in first with regulatory changes, tax reforms, grants and subsidies, investments in infrastructure and other measures, "she said. “Look at how the federal government has responded since the pandemic began to wreak economic havoc in March: billions of dollars in grants, grants, lifelines and projects have been announced.”

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