Melbourne home values: March improvement despite looming falls
The COVID-19 shutdown has already had an impact on Melbourne property prices and the worst is yet to come, experts say, despite house and unit values rising slightly in March.
Melbourne property values are expected to take a hit in the months to come, despite notching a slight improvement in March.
A 0.4 per cent rise to a $695,299 median dwelling value was the smallest monthly jump seen in Victoria’s capital this year, according to CoreLogic’s Hedonic Home Value Index.
The leading data firm said value growth for houses and units slowed across the board in Australia during the second half of the month as government shutdown measures came into place.
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Head of CoreLogic research Tim Lawless said it was “impossible to fathom” how much values could fall, without a clear picture of how long measures to stop coronavirus would stay in place.
“Capital growth trends will be contingent on how long it takes to contain the virus and whether additional constraints on business or personal activity are introduced,” Mr Lawless said.
“Arguably, the longer it takes to contain the virus and bring economic operations back to normal, the higher the downside risk to housing values.”
Melbourne’s strong start to the year, where values grew 2.9 per cent in the quarter, would help keep the market afloat, he added.
Advantage Property Consulting director Frank Valentic said house prices could fall as some buyers lost their jobs and pulled out of the market.
“A correction similar to the last downturn of about 10 to 20 per cent could be possible if this (coronavirus) goes on for another 12 months,” Mr Valentic said.
“If you can hold selling off for a while, just wait for the market to bounce back. But if you have to sell, get onto the market sooner rather than later as we’ll see more adjustments towards a buyer’s market.”
CoreLogic’s report showed Melbourne’s inner east and inner south had slight value drops of about 0.2 per cent in March.
Realestate.com.au chief economist Nerida Conibee said “without a doubt” prices would fall across Melbourne in the coming months.
“If we are getting into a situation where there’s a drawback in buyer activity, then that will keep a cap on growth,” Ms Conisbee said.
“But there’s still quite a bit of demand for listings in premium suburbs like Hawthorn, South Melbourne and Albert Park.”
She said government economic stimulus packages, which could freeze mortgage payments, would help “cushion the blow” in terms of a potential downturn.
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Originally published as Melbourne home values: March improvement despite looming falls