The Australian property market has grown throughout the last quarter although it is showing signs of cracking with a weak second half of the month of March, new research has found.
According to the latest CoreLogic House Hedonic Home Value Index, following a strong start to the year property is feeling the impacts of weak economic growth, government policy and falling consumer confidence.
“Although Australia’s housing markets have begun to enter a period of disruption, they are coming from strong foundations,” CoreLogic head of research Tim Lawless said.
Over the month of March, housing values rose across every capital city apart from Hobart (which declined -0.2 per cent), while over the March quarter, every capital city recorded a rise in housing values.
The lowest quarterly gain was in Darwin and Adelaide, each increasing 0.6 per cent; a similar story occurred across the regional areas of each state with values higher over the month and quarter.
However, Tim Lawless noted that recent trends in the market have become less relevant as we move into a period of unprecedented uncertainty which is likely to impact further on household confidence and drag Australia’s economy into a recession for the first time in almost 30 years.
“The housing market won’t be immune to a drop in sentiment and weaker economy, however the extent of the impact on dwelling values remains highly uncertain. 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.”
He said, “The extent of any fall in housing values is impossible to fathom without first understanding the length of time this health and economic crisis persists. Arguably, the longer it takes to contain the virus and bring economic operations back to normal, the higher the downside risk to housing values.”