Below trend growth to continue
Australian home values moved through a fourth month of COVID-induced falls.
Australian home values moved through a fourth month of COVID-induced falls, with the CoreLogic home value index recording a 0.4% decline in August. Although housing values continued to trend lower from their pre-COVID highs, at least from a macro perspective, the rate of decline has eased over the past two months, and five of the eight capitals recorded steady or rising values through the month.
The Melbourne housing market is the main drag on the headline results. Following a similar decline in July, Melbourne home values fell by 1.2% in August. This was the largest fall recorded amongst the capital cities.
Outside of Melbourne, the remaining capital cities all recorded slightly better conditions relative to July. The rate of decline eased across Sydney and Brisbane, while home values held firm or showed a subtle rise across the remaining capitals.
The performance of housing markets are intrinsically linked with the extent of social distancing policies and border closures which also have a direct effect on labour market conditions and sentiment. 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.
Regional markets have continued to outperform their capital city counterparts across the largest states. While CoreLogic’s combined regionals index has lost momentum relative to the pre-COVID trend, the index has held virtually flat since May.
Find out the latest news for each capital city by clicking the link and watching the videos below or read the full September 2020 Housing Market Update Transcript.
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