Brisbane and South Australia appear set to lead Australia’s real estate markets back up the property ladder later this year.
But new research is showing the “car crash” doom and gloom fallout expected from COVID-19 has not eventuated, and that our “insurance policy” is already kicking in.
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PRD Real Estate’s Australian Economic and Property Report for 2020 released this week shows the nation’s two hardest hit capitals, Melbourne and Sydney, still had the strongest median house price growth over the 12 months to the end of June.
Despite falling values recorded in Adelaide, the report reveals the nation’s capital cities rose an average 1 per cent over the period. The PRD capital city figures track inner-ring suburbs.
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The property price analysis second guesses doom and gloom predictions from banks and data firms, which have predicted home values could fall $100,000 in some cities.
A 32 Joynt St, Hamilton, home in Queensland with its own skate bowl inside has sold for millions.
PRD chief economist Dr Diaswati Mardiasmo likened the situation to the aftermath of a car crash and said early forecasts based on transactions activity in March or April had “only captured the shock, not what was done to try and balance the shock”.
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Describing government stimulus programs such as JobKeeper and HomeBuilder, as well as rapidly improving real estate industry technology, as the nation’s “insurance policy kicking in” the situation now didn’t look so bad, Dr Mardiasmo said.
“Our property market is still growing,” she said.
“People are still buying and selling. Our vacancy rates aren’t doing that badly.”
The Victorian vendor of this 513 Station St, Box Hill, home turned down a pre-auction offer $200,000 above their reserve — and got an even bigger price under the hammer.
Real Estate Institute of Australia president Adrian Kelly backed the research and said while many were surprised at how well real estate had held up in the face of the virus, there were reasons for its success.
Low interest rates, a shortage of homes for sale across the nation and continued signs the nations lenders were determined to create a “soft landing” for those who had lost work.
“So we aren’t likely to see the level of forced sales of the global financial crisis,” Mr Kelly said.
“If we all keep doing the right thing we could get out of this unscathed.”
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Despite early signs of success the next six months would be important as increasingly varied COVID-19 case numbers in different states set the nation’s housing markets up to run at very different speeds.
“At the moment, it feels like we are balanced on a tightrope,” Dr Mardiasmo said.
“But the rate of infection and how COVID is going in different states is literally creating different speed property markets.”
She said at present Queensland and its capital Brisbane appeared set to be the nation’s top performers over the coming six months, though it had grown just 3.6 per cent in the past year.
South Australia was also well placed, despite a 15.4 per cent reduction in the median house price.
NSW and Victoria would both trail behind as they were left to focus on fighting the virus rather than rebooting their economy in the short term.
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