High End Homes lead the fall in Home Values

Wednesday 08 Jul 2020

First National Real Estate Connect  Windsor and Richmond in the Hawkesbury region of NSW says the latest CoreLogic house price data shows the devil is in the detail when it comes to housing market statistics. While the key take-out is that house prices fell 0.7% nationally last month, the statistic is heavily influenced by substational  falls happening in Sydney and Melbourne’s luxury home suburbs.


Prices fell marginally across five capital cities but actually increased in three. Sydney, Melbourne, Brisbane, Adelaide & Perth saw minor value falls, whereas Hobart, Canberra and Darwin each rose subtly. By any measure, the movements were small and, when considering the 12-month change in home values, they in fact reflect double-digit growth. Sydney & Melbourne, which are considered barometers for the national housing market, finished the financial year up by 13.3% & 10.2% respectively.


First National Real Estate Connect principal Andrew Mansour says if you contrast this with the upper quartile in Sydney & Melbourne, it’s evident where the real market shifts are occurring.


‘In Sydney, Mosman fell 2.5%. Melbourne’s Malvern fell 4.8%, so when you calculate a national average for house prices, the result is skewed in a way that makes it look worse than it really is. For Australians looking to buy homes in low to middle price ranges in the Hawkesbury of NSW there’s been very little change as a result of the Coronavirus pandemic’ says Andrew Mansour.


‘Looking at the most affordable quartile, Sydney’s home actually increased by 0.2%, or $1,770 at the June median price. In Melbourne, the decline was 0.5% for the month, or $1,373 down from the June median. Considering the expert economist pandemic March predictions of 30% declines, Australia’s housing market is demonstrating resilience and a very different trend’ says Andrew Mansour


Wait til September’ is the catch-cry of those believing the Australian market will be severely affected by the end of government assistance and bank forbearance policies. It’s a fact that the low number of homes for sale combined with historically low interest rates contributes to demand having exceeded supply recently,and this has played a role in underpinning prices.


While some homeowners are worried about what will happen when government assistance and bank forbearance policies are intended to be wound-back in September, Andrew Mansour says imagining that the government will not adapt or extend its assistance, if considered critical, would be inconsistent with its management of the COVID-19 crisis thus far.


CoreLogic says agents are producing 6% more comparative market analysis reports than they were at this time last year, confirming First National’s view that COVID-19 has galvanised Australians into action. They are taking steps to turn former ‘plans’ into a lifestyle reality.


First National Connect is anticipating a very busy spring!


Based on levels of pre-listing activity we are currently seeing in the Hawkesbury, housing stocks look set to increase over the coming months but job security and overall economic confidence will be the deciding factor in what happens with home values in the final months of 2020.