Metro Melbourne surpasses $1m mark for the first time
While it has lagged behind other capital cities in post-pandemic recovery, Melbourne has now cemented its resilience, re...
The states and territories are on different paths when it comes to their COVID recovery, but what rings true across the country is the sheer resilience the property market has demonstrated in truly unprecedented times.
CoreLogic’s latest Quarterly Economic Review delves into the individual journeys of the Aussie states and territories, revealing how they’re recovering from the impacts of the once-in-a-century pandemic on their property markets.
Let’s take a closer look.
Both Sydney and regional NSW were back into the upswing phase of the property cycle in the three months to November.
Sydney dwelling values were up 0.3 per cent, while regional values were up 3.1 per cent. For regional NSW, this is the highest quarterly growth rate through 2017.
“Indicators are showing the regional NSW dwelling market is still on the rise, despite the recession. Every regional market in NSW has seen an increase in dwelling values since March through to November,” according to Ms Owen.
“There were around 18,000 regional dwelling sales in the three months to November, up a remarkable 23.3 per cent on the same period in 2019.”
Looking forward to 2021, Ms Owen said that NSW dwelling markets are generally expected to remain in upswing, but pockets of the market are at risk of further decline.
“Demand is generally shifting from inner-city stock preferred by investors to detached housing at the periphery of the metropolitan area and in regional NSW.”
Despite Melbourne dwelling values declining and now sitting at 5.0 per cent below the record-high value reached in March 2020, there have been signs of an economic and property market uplift in Victoria through to November, according to Ms Owen.
New listings across Melbourne rose from 2,756 in the month of September to over 8,000 in November. Meanwhile, sales activity rose from 1,546 to an estimated 4,301.
However, the increase in sales activity has not matched the big increase in stock on the market, “which may have a dampening effect on the recovery of the Melbourne market”, Ms Owen noted.
Further, the Melbourne rental market has been particularly impacted by the pandemic, which may also end up impacting property values.
Across Brisbane, dwelling values have risen 0.9 per cent from the onset of the pandemic in March through to November, with dwelling values now at a record high. Still, despite the recent uplift in the dwelling market across Brisbane, unit values remain 8.9 per cent lower over the decade.
Remaining optimistic, Ms Owen said: “Most Queensland dwelling markets are in upswing. Grouping Queensland into 19 submarkets, 17 have seen dwelling value increases since the onset of COVID-19.”
“The Brisbane Inner City and Brisbane West markets were the only dwelling markets to see a fall in values during the period.”
Like many of the smaller capital cities through COVID-19, Adelaide dwelling values avoided price declines. The combined value of the Adelaide dwelling market is 4.1 per cent higher from March through to November, and dwelling values are currently at a record high.
In the three months to November, dwelling value increases were strongest across the North of Adelaide, where typical dwelling values were $378,705.
According to Ms Owen: “The rate of change in Adelaide dwelling values has historically been among the least volatile of the capital cities. But with momentum building across the market, quarterly growth rates have reached the highest level in 10 years.”
Western Australia, in particular, is now returning to an upswing phase of the property cycle, following a long correction in values and a temporary interruption to the recovery through COVID-19, Ms Owen said.
In the year to November, house values in Perth increased 0.9 per cent, while unit values increased a more modest 0.1 per cent. For the entire Perth dwelling market, this is the first year-on-year increase in dwelling values in six years.
Perth has also seen the highest annual growth in rent values since the onset of COVID-19, with rent incomes up an incredible 8.2 per cent in the year to November. This is expected to improve property investor participation in 2021.
Now the fourth most expensive capital city unit market, with a median unit value of $414,966 as of November, Hobart continues to be among the most popular property markets in Australia.
Hobart dwelling values rose 3.9 per cent from the end of March through to November, and regional Tasmanian dwelling values increased 5.8 per cent in the same period, with both dwelling markets sitting at a record high in November.
Regional Tasmania has also benefited from demand across the high-growth city of Hobart, with both dwelling markets sitting at a record high in November, Ms Owen noted.
On the other hand, gross rent yields for dwellings in Hobart declined a significant 40 basis points over the year to November. However, at 4.6 per cent, it is still the second highest of the capital cities behind Darwin (6.0 per cent).
After a long correction in NT property values, Darwin has seen the highest level of capital growth in dwelling values of the capital city markets from March through to November, increasing 5.8 per cent. Still, Darwin dwelling values are 27.4 per cent below the record high in 2014.
Further, despite significant fluctuations in both rent and purchase prices, gross rent yields have remained remarkably steady since May 2014, fluctuating less than 1 percentage point.
Gross rent yields in Darwin dwellings were 6.0 per cent at November, the highest of the capital cities.
Dwelling values across the ACT rose 3.3 per cent in the three months to November, taking values 5.2 per cent higher since the onset of stage 2 restrictions in March.
According to Ms Owen: “The combined ACT dwelling market has hit a fresh, record-high value every month since September 2019.”
“Typical ACT dwelling values are the third most expensive of the capital city markets behind Sydney and Melbourne, but the third most ‘affordable’ behind Darwin and Perth, due to high local incomes in the capital. Continued price increases will lead to a deterioration of affordability across Australia’s capital.”
For a more general overview of CoreLogic’s data, click here.