National home values have risen in April to defy widespread predictions of a property market slump due to the coronavirus epidemic.
Several markets have even outperformed their growth rate of the previous six months.
According to CoreLogic’s Hedonic Home Value Index for April released today, home prices pushed up 0.3 per cent across the country last month despite the COVID-19 lockdown that has hit the economy hard and put a temporary halt to open home inspections and in-person auctions.
Sydney property led the way in April. Picture: Sam Mooy/The Australian
In a statement releasing the promising data CoreLogic said: “In the context of rapidly weakening economic conditions and the broader COVID-19 related disruption, the April housing market result looks remarkably resilient”.
Across the capital cities values rose by 0.2 per cent with regional areas outperforming that surprise statistic to grow by 0.5 per cent.
“I’m feeling much more confident about market conditions than I was mid-March but we’re not of the woods yet. That would be my summary,” realestate.com.au chief economist Nerida Conisbee said.
“It comes back to the fact this is not a financial crisis. Interest rates remain very low and the banks are lending so if you have a job you are in quite a good situation to buy. That’s what’s propping up the market.
“There is also a mortgage freeze so people are not being forced into distress sales.
“The other factor helping is that our rates of infection have been pretty low. Some states are easing restrictions, that is another good sign.”
Prices grew slightly in Adelaide, despite COVID-19. Picture: Brad Fleet
Sydney and Adelaide led the way with 0.4 per cent growth to register a median dwelling value of $889,992 and $439,397 respectively.
Brisbane grew 0.3 per cent to a median value of $507,982, Perth was up 0.2 per cent to $448,355. Darwin’s values rose 1.7 per cent to $402,225, Canberra was unchanged at $626,997, Hobart fell 0.1 per cent to $484,645. Melbourne took the heaviest hit with a fall of 0.3 per cent to a median value of $695,761
“Although housing values were generally slightly positive over the month, the trend has clearly weakened since mid-to-late March, when social distancing policies were implemented and consumer sentiment started to plummet,” CoreLogic head of research Tim Lawless said.
The figures are a welcome surprise to the industry, amid fears of a crash in prices.
However the growth is down on what it had been in the leading markets. For the six months to March, both Melbourne and Sydney had enjoyed an average growth rate of 1.7 per cent per month.
realestate.com.au chief economist Nerida Conisbee
But, Perth, Adelaide and Darwin outperformed the six-month average pace of change.
“The Australian version of this global health and economic crisis is only a month-and-a-half old, and it looks inevitable that there will be some downwards pressure on housing values over the coming months,” Mr Lawless said.
“The magnitude of housing value falls depends on a broad range of factors with most hinging on the timing and extent of social distancing policies being lifted.”
“The good news is that Australia has managed to flatten the spread of the virus more effectively and efficiently than expected and we are already seeing a subtle easing of social distancing policies in some states. An early return of economic activity should support a lift in consumer spirits which in turn should see housing market activity sparking back to life.”