Despite the decline in home values ??in May, property owners and investors are unlikely to sink into negative equity anytime soon, according to a recent CoreLogic market report.
The value of homes in Australia fell for the first time since June of last year, falling 0.4% on a monthly basis. That puts the median value of a home at $ 557,818.
Jade Harling, analyst at CoreLogic, said that the value of homes across the country remains 8.3% higher than a year ago. Of all the capitals, only housing values ??in Perth and Darwin continued to be lower on an annual basis.
"Although home values ??are currently sliding or stabilizing, recent history implies that most homeowners have some level of protection that will help protect themselves from negative equity," she said. declared.
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During the month, values ??fell in five of the eight capitals, with Darwin posting the largest drop to 1.6%. Hobart, Adelaide and Canberra saw their home values ??increase by 0.8%.
The table below shows the price movement in each capital as well as the combined data of the housing values ??of the regional capitals and combined at the end of May:
Tim Lawless, research manager at CoreLogic, said the minimal drop in values ??indicates the resilience of the housing market despite the economic impacts of COVID-19.
"With restrictive policies being gradually lifted or relaxed, the downward trajectory of housing values ??could be softer than expected," he said.
The regional markets were the least exposed to the effects of the market, their average value remaining the same during the month.
However, Lawless said that there were other factors that could probably argue in favor of lower prices.
"Ultimately, the government's stimulus package will be back and borrowers' repayment vacations will expire. In the absence of these policies, housing values ??could be put under further downward pressure if economic conditions did not recover by the end of the year, "Lawless said.
Improvement of sales, list of activities
Although market activity remains moderate compared to its average performance in the past, it managed to rebound after the April slump, with sales up 18.5% in May .
Lawless stated that this coincides with a steady increase in consumer sentiment and relaxed COVID-19 restrictions during the month.
"Consumers feeling more confident, households are better equipped to make decisions with high commitment such as buying or selling a house. An increase in activity on the housing market is also expected to support wider economic activity, with housing turnover providing positive flow effects to other sectors, including retail, construction and banking, "he said. .
A separate report from SQM Research showed that real estate listings increased 3.9% during the month. All capitals, except Canberra, reported an increase in registrations.
Louis Christopher, managing director of SQM Research, said the increase in listings was due to older stocks that had not been sold.
"It tells me it's an uneven market with suppliers struggling to meet their price expectations," he said.
New registrations declined slightly over the month, which, according to Christopher, is not normal for the month of May.
"Although we have seen increases in new listings for Sydney and Melbourne, other cities such as Brisbane, Adelaide and others have registered a decrease in new stocks. Many regional sites have also registered declines in new registrations, "said Christopher.
The table below shows the figures for the lists in each capital:
