Perth values remain steady
Australian home values moved through a fourth month of COVID-induced falls in August, with the CoreLogic home value index recording a 0.4 per cent fall, though Perth values remained steady.
The 0.4 per cent drop was driven by a 1.2 per cent decline in Melbourne, 0.5 per cent in Sydney and 0.1 per cent in Brisbane, with all other capital cities recording steady or rising values.
Perth home values witnessed no change through the month, an improvement on a slowing decline for the city over the last 12 months, according to REIWA President Damian Collins.
“Going back a year or so ago, we were declining eight per cent per annum, now it has only been down two per cent over the last 12 months,” he said.
“I think that monthly number is going to go to the positive, if not this month, certainly in the months ahead, because agents on the ground are reporting a lot of people through home opens and prices are definitely starting to move.”
In additional positive news, despite the stationary values overall, nearly half (45 per cent) of Perth suburbs actually witnessed price growth, according to REIWA data.
“Kelmscott saw the biggest increase to its median in August with a 5.4 per cent increase to $320,000, which was followed by Riverton (up 3.9 per cent), Duncraig (up 3.7 per cent), Piara Waters (up 3.6 per cent), and Carramar (up 3.4 per cent),” Mr Collins said.
“Interestingly, three of the top five suburbs had a median sale price under Perth’s median of $475,000, which suggests people are taking advantage of properties in Perth that are priced at the lower end.
“When we go down into more detail, there are some suburbs still struggling a little bit – they have that oversupply legacy – but you will find in a lot of established suburbs, particularly within 12km to 20km from the CBD, there is not a lot of new supply or land releases, and that is where the demand is really strong and there is not much stock around.”
Listings for sale were also down in August, with only 10,627 properties for sale on reiwa.com, which was 1.2 per cent lower than July and 23.2 per cent lower than the same time last year.
“In the last few months, sales activity has been particularly strong due to the various government bonus schemes, so it is only natural as the interest around the stimulus eased we saw activity in August decrease compared to July,” Mr Collins said.
According to CoreLogic’s Head of Research, Tim Lawless, COVID-19 measures nationally have had a direct effect on housing values.
“The performance of housing markets is intrinsically linked with the extent of social distancing policies and border closures, which also have a direct effect on labour market conditions and sentiment,” he said.
“It’s not surprising to see Melbourne as the weakest housing market considering the extent of the virus outbreak and subsequent restrictions, which have weakened the economic performance of Victoria.
“Looking forward we are likely to see a diverse outcome for housing markets around Australia, depending on how well the virus is contained and a region’s exposure to other factors such as its reliance on overseas migration as a source of housing demand.”
In good news for buyers, the latest Real Estate Institute of Australia Housing Affordability report revealed Western Australia was once again the most affordable state to buy and rent in, improving 0.7 per cent compared to the June 2019 quarter.
REIWA President Damian Collins said strong demand in the rental and sales market meant affordability was likely at the best levels we would see, and now was a favourable time for both homebuyers and investors to get into the market before prices started to pick up.
The report found the proportion of income required to meet loan repayments in WA improved to 24 per cent in the June 2020 quarter, a decrease of one per cent compared to the previous quarter, and the average loan size reduced 2.1 per cent to $397,739.
“It certainly appears WA has escaped the COVID-19-induced property slowdown and, given the high levels of demand and limited supply, we may even see house prices rise later in 2020,” Mr Collins said.
“I would encourage anyone thinking of buying, whether as a homebuyer or investor, to act sooner rather than later.”