Australian Property Market Update

CoreLogic has just released the latest Australian Property Market Report reflecting on activity and prices across the nation in September, and whilst last month home values declined in Sydney and Melbourne; it is a mixed bag as the other six capitals all records a life in home values, and regional markets are continuing to perform strongly.  See below graph (source: CoreLogic)

At a broad level, the combined regionals index is up by 0.8% since March while capital city values have fallen by 2.6% over the same period.   The resilience in regional values can be attributed to a number of factors.

  1. Homes in regional areas are generally more affordable than their capital city counterparts, and don’t have as a high a base to fall from.
  2. Transitional shift of demand away from cities to major regional centres, particularly those in commutable distance to the city. This is driven by lifestyle and affordability factors, and has been a phenomenon occurring pre-COVID, that shows no signs of slowing anytime soon.
  3. Remote working arrangements – an increasing number of the workforce can now work from home, this was also an increasing phenomenon prior to COVID, but has accelerated enormously during lockdown.

Overall, CoreLogic reports consumer sentiment in the marketplace is up, and increased demand relative to tighter stock levels is protecting prices across many markets.   Nationally – new listings are 22% lower than a year ago, and 25% below the 5-year average.  Total advertised stock is 19% below last year’s levels.  There has also not been the volume of distressed sales originally forecast.  All of these factors, in the face of growing demand, bode well for the health of the property market, and the protection and growth of the value of your investment.

This month’s Federal Budget has been well received by property commentators, who see it as a budget focused on stimulating spending in the economy, which will create employment growth via increased business and consumer confidence. Australia really has (overall) coped exceptionally well during this pandemic, especially compared to similar economies, and our economic strength and strong housing market has underpinned us in this time of crisis.  There are still challenges to face, but there are a lot of positives that are buffering any significant pain.