August 6, 2020
Australia’s house prices have plunged by 2% during the COVID-19 pandemic, reversing more than two years of gains.
Domain has released its House Price Report for the June 2020 quarter, which provides insight on the latest property market movement. This quarter depicted that nationally house prices have dropped 2.0% and unit prices have dropped 2.2% over the last March to June.
The price drop however, is a sign that the government stimulus measures are managing to counter much of the COVID-19 drag.
Currently, unemployment figures continuously rising, and household incomes continue to shrink as the number of people without work increasing from 85,700 to 927,600 people, the report shows a glimmer of hope that the economy isn’t taking such a massive hit as had originally been feared.
“The outlook for the housing market is definitely more stable than the broader economy,” said Domain Senior Research Analyst Nicola Powell. “While prices in most capital cities have declined, the falls have been minimal to date.
“The unprecedented government stimulus with HomeBuilder, JobKeeper and JobSeeker, mortgage holidays, low stock levels and record low interest rates are shielding values from any significant declines, and helping to retain stability in the housing market,” Dr Powell said.
Melbourne so far has borne the greatest brunt of the price slump, while Sydney has shown to have the second-biggest drop, following with Perth in third.
Sydney’s house and unit price recovery were halted over the June quarter, down 2% for houses and 1.9% for units. Sydney was in an upswing prior to COVID-19, but now the median price sits at $1,143,012 for houses and $735,417 for units. Price falls to date have been minimal due to significant government stimulus, mortgage holidays and low interest rates which have helped to support home values.
Melbourne’s house prices tumbled 3.5% with the median house price sitting at $881,369, over the June 2020 quarter. Unit prices have also declined by 1.7% and the median house price is now at $537,345 The second lockdown will continue to stall the positive momentum they had recovered from.
Greater Brisbane house prices fell 1.4% over the June 2020 quarter. This is the first quarterly fall in a year and the steepest in almost nine years. There was a promising growth prior to COVID-19, although reversed in June due to the economic aftermath of border closures and shutdowns. Unit prices have remained stagnant at 4.1% across Brisbane.
Adelaide was one of only three cities to record house price growth over the June quarter. The price lift was a modest 0.2% and this has pushed house prices to a record high of $553,036. Unit prices have slipped 2.9% over the June quarter, however. Adelaide provides affordability and stability which would be beneficial for the Australian economy.
A house price recovery is still on the cards for Perth as the economic fallout appears to have paused a reverse in growth. House prices have declined by 1.5% and unit prices have decline by 4.9%. Perth’s current median house price is $522,414 and the unit median price is $334,284.
Hobart house prices has seen a rise of 1.4% with the current median price at $529,388. For the first time on record, it is now more expensive to purchase a house in Hobart than it is in Perth and Darwin. House prices are 57.3% and units 70% higher than five years ago. Unit prices has declined by 1.5% with the median value price at $429,464.
Canberra house prices have increased with a strong 4.1%, bringing up the current median house price to $819,090 breaking a record high. This is also the first time Canberra house prices have pushed over the median value of the combined capitals since 2013. Unit prices slipped 1.3% over June with a median price of $453,750.
Darwin’s house prices fell over the June quarter reversing the positive trend that had started to emerge. Darwin still remains the most affordable city to purchase a house, as even though they declined by 1.0% over the quarter, their median house price is $516,213. The unit prices have steeped lower with a 3.7% drop and the median price sitting at $241,461.
Words by Ece Demir
- Aussie house prices nosedive 2% during COVID-19 pandemic
- Domain House Price Report
- House prices fall by 2% across Australia during June quarter: Domain House Price Report
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