Homes prices up ‘far earlier than thought’: CoreLogic

The second consecutive month of price rises has all but locked in an upward swing in home values.

Shaun and Linda Borg, with kids Ava and Connor, outside their home in Melbourne’s Essendon. Picture: Aaron Francis

Fears of a COVID-19 property market slump have failed to materialise after home values in Melbourne rose over the past month, the first increase since the start of the pandemic, while prices were up by 0.9 per cent across the nation.

The second consecutive month of price rises — from 0.4 per cent in Sydney to 1.9 per cent in Darwin and Canberra — has all but locked in an upward swing in home values as economic conditions improve and COVID-19 restrictions ease.

AMP chief economist Shane Oliver said a permanent and major impact on the housing market had been avoided, and that it had fared far better than anticipated, with early forecasts that home prices could fall by up to 20 per cent.

Mr Oliver said extensive government stimulus, record low interest rates, the desire to “escape from the city”, ongoing mortgage holidays and the further easing in lending standards flagged for next year had combined to soften the impact of the pandemic.

“As a result, property prices have turned up far earlier than I have been expecting and there appears to be a bit of (a fear of missing out) creeping into some markets — particularly outside of Melbourne and Sydney,” he said.

Home values hit record highs in 32 of the country’s 88 regions in October, according to figures released by market analysts at CoreLogic on Tuesday, with median prices reaching record highs in Brisbane ($515,267), Adelaide ($459,896), Hobart ($505,683) and Canberra ($672,866).

Tim Lawless, CoreLogic’s head of research, said the speed of the current growth suggested housing prices might recover from the COVID-19 downturn as early as January, with some markets approaching “boom-like conditions”.

The resurgence in home prices — and the end of a long lockdown — could not have come at a better time for the Borg family, who are hoping the pent-up demand from weeks with no listings and auctions will deliver them a high price for their Essendon home.

“There is still a lot of middle Melbourne that got through COVID fairly unscathed,’’ said Shaun Borg, who is selling the home with his wife, Linda. “We perceive the market is in a lull and feel it will bounce back.”

Ms Borg added: “We think it is a good time to sell now, when the market is still scarce of good-quality property”.

Nelson Alexander selling agent Jon McKenna said he had been inundated with inquiries since the home was listed online on Monday. Five groups have already viewed the property, with a further four already scheduled for later in the week.

According to the CoreLogic data for October, Sydney had the lowest growth for the month, up just 0.4 per cent. Canberra and Darwin recorded the largest month-on-month change of 1.9 per cent each, followed by Hobart (up 1.4 per cent), Adelaide (1.3 per cent) and Brisbane (0.6 per cent).

Australia’s regions continued to benefit from the pandemic, with prices up 1.4 per cent in the largest climb in 16 years.

Ray White, one of the county’s largest residential real estate agencies, reported a record month of sales in November valued at $6.48bn, a 30 per cent increase year-on-year.

Group managing director Dan White said he had never seen a national market so in sync during a growth phase. “Buyers have been active for a long time, it has been a six-month build-up,” he said. “There is an incredible amount of activity across the length and breadth of the country.”