The housing market in Australia recorded its second month of falling prices in the midst of the current COVID-19 pandemic. Despite this, the markets continued to show increased activity, as shown in the latest CoreLogic report.
National housing prices fell 0.7% in June, with Perth and Melbourne reporting the largest drop to 1.1%. Of all the capitals, only Hobart, Darwin and Canberra recorded gains in housing values ??during the month.
This downward pressure on house values ??is considered to be moderate, with capitals recording a cumulative decline of 1.3% in the past two months, said Tim Lawless, director of research at CoreLogic.
"Various factors have helped protect the value of homes from further declines, including the still-low inventory levels announced and the government's significant stimulus packages," he said.
Read also: Are regional markets gaining ground?
In addition, Lawless said the market was also benefiting from low interest rates and lender tolerance policies.
"These factors helped keep urgent sales out of the market, providing additional insulation to home values," he said.
In fact, despite the drop in values, the market remained busy during the month with an estimated sales growth of 29.5%, continuing the increase of 21.5% in May.
On an annual basis, prices maintained their solid position, Sydney and Melbourne recording double-digit increases of 13.3% and 10.2%, respectively.
The only capitals where values ??show declines on an annual basis are Perth and Darwin, but even in these cities, house values ??were at the start of a recovery phase before COVID-19.
However, Lawless said that there remains uncertainty about the direction of the market in the longer term.
"While it is encouraging to see that lenders have recently hinted at an extension of their leniency policies, government stimulus will eventually wane and banks will demand that borrowers repay their loans. The longer-term prospects for the housing market are largely dependent on how well the economy follows when these supports are removed, "said Lawless.
The table below shows the price movements in each capital over the past month:
Main suburbs:
west geelong
,
vale eagle
,
coolbellup
,
wiley park
,
leumeah
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