Despite the social distancing measure that has been put in place to curb the spread of COVID-19, property markets in Melbourne are remaining resilient.
That’s the belief of CoreLogic’s Head of Research, Tim Lawless as the latest figures on house prices were released.
Melbourne saw a slight dip in median dwelling values by -0.9%, with houses down -1.1% and units -0.6%. However, if we look at the annual data house values are still sharply higher, with Melbourne prices 11.7% on an annual basis.
The small fall in prices comes on the back of auction markets being pushed online, while home opens were extremely limited.
CoreLogic’s Tim Lawless felt that the small falls in price, shows just how strong the property market is at the moment.
“Considering the weak economic conditions associated with the pandemic, a fall of less than half a per cent in housing values over the month shows the market has remained resilient to a material correction. With restrictive policies being progressively lifted or relaxed, the downwards trajectory of housing values could be milder than first expected,” said Mr Lawless.
One of the issues for Melbourne markets has stemmed from vendors withdrawing homes for auction. But Mr Lawless is seeing vendor confidence return with auction clearance rates also rebounding strongly.
“We have seen a sharp reduction in the number of auctions being withdrawn, and more vendors are testing the market under auction conditions rather than accepting an offer prior to the auction.”
The reduction is auction activity, weighed on the higher end of the market, which has traditionally been one area that has benefited the most fro the auction process. CoreLogic expects that will change very rapidly as vendors and agents begin the marketing process.
CoreLogic also noted that this high-end segment of the market is substantially higher than this time last year.
“Melbourne’s top quartile values are still 13.9% higher than they were a year ago, while Sydney’s top quartile is up 16.5% over the year.”
Overall, the outlook is strong for the property market given everything that has happened in the last few months according to CoreLogic.
“While downside risk remains, the trajectory of the housing market is looking healthier than what we were expecting a bit over a month ago. The virus curve has been flattened more quickly and effectively than even the best case scenario forecasts, meaning some of the most restrictive policy settings have been either lifted or relaxed. Consumer spirits have lifted, vendors are starting to test the market and buyer numbers have risen.”