Melbourne home values are taking the biggest hit of Australian cities amid COVID-19. Picture: Alex Coppel
Melbourne’s coronavirus-driven property downturn has deepened, with the city again recording the largest monthly and quarterly value declines of any Australian capital.
House and unit values fell 1.2 per cent in July to a $678,334 median, raising Melbourne’s quarterly drop to 3.2 per cent, according to CoreLogic’s latest Hedonic Home Value Index.
The next worst-performing capitals were Sydney, with 0.9 per cent monthly and 2.1 per cent quarterly declines, and Perth, down 0.6 per cent and 2.2 per cent.
Home values also dipped 0.5 per cent in regional Victoria in July.
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Melbourne’s property downturn continues to deepen. Picture: AAP Image/Michael Dodge
The figures were released on Melbourne’s first morning under tight stage four COVID-19 restrictions, which have placed the city under an 8pm-5am curfew and banned residents from travelling further than 5km from their homes for the next six weeks.
Real Estate Institute of Victoria president Leah Calnan said she had not been informed of any further restrictions being placed on the Melbourne real estate industry, but that may change as a result of Monday’s more detailed announcement from Premier Dan Andrews.
“As of yesterday (Sunday), we were still able to conduct online auctions and private inspections by appointment,” she said.
Ms Calnan understood regional Victorian markets would be restricted to these methods when its stage three lockdown kicked in.
She noted many regional agents had already converted to private inspections, rather than open homes, given a large chunk of the buyers they dealt with were based in metropolitan Melbourne.
“Agents will just continue to adjust with any further changes that might be announced,” she said.
“Agents have continued to acknowledge the very privileged place they work in. We’ll make sure they continue to abide by the highest level of hygiene and processes.”
Ms Calnan said the combination of low levels of available housing stock, low interest rates and financial support measures like the federal government’s JobKeeper and mortgage holidays had insulated Victoria’s market from large price falls during a “very challenging” period.
Nick Johnstone conducts a socially distanced auction between lockdowns. Picture: Alex Coppel
It’s not clear when conditions will improve in Victoria amid a lengthened second lockdown. Picture: Jason Edwards
CoreLogic’s head of research Tim Lawless agreed, adding the total number of properties for sale across Australia fell a further 4.3 per cent in the four weeks to July 27, to sit 15.2 per cent lower than they were a year ago.
But he warned the downturn could deepen further following the tapering of financial support from October, and loan repayment holidays expiring at the end of March.
“Urgent sales are likely to become more common as we approach these milestones, which will test the market’s resilience,” Mr Lawless said.
He added the virus’s second wave and accompanying further border closures and stricter restrictions was likely to “further push consumer sentiment down (and) weigh on both home buying and selling activity more broadly”.
Consumer sentiment could decline further. Picture: Alex Coppel
Wakelin Property Advisory director Jarrod McCabe expected Melbourne’s stage four lockdown to bring “added tension” and further thin out the pool of potential buyers active in the market.
“The lack of stock throughout the whole period of COVID-19 has meant prices haven’t been as impacted as people may have thought, but that’s not to say it won’t happen,” he said.
“It’s difficult when vendors don’t have the confidence to put properties on the market and buyers aren’t as active, given lot of them don’t have the ability or the confidence to borrow.”
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