Australian Residential Housing Market Report June 2020
Quarterly growth in national dwelling values slipped to just 0.6% in the 3 months to May, as dwelling prices saw the first month on month decline since June 2019.
Annual growth rates understate the recent slowdown in momentum, but point to an improving market before the onset of COVID 19.
Month on month results over May show that declines in Sydney and Melbourne market were led by the upper quartile of values.
The annual uplift in dwelling market values at May 2020 was high across Sydney, Melbourne, Hobart and the ACT.
The CoreLogic daily home value index showed a change of pace halfway through March. Data to June 4th shows the combined capital cities declined by half a percent in the past 28 days.
Quarterly and annual change in dwelling values in all capital cities including Sydney, Melbourne, Brisbane, Adelaide, Hobart, Perth, Darwin, ACT.
CoreLogic estimates that settled sales bounced back remarkably over May, increasing 18.5% over the month after a revised 32.6% fall in April.
Housing market activity is closely aligned with consumer sentiment. Although consumer confidence readings remain well below average, spirits showed a strong lift in May.
Annual growth in rents recovered slightly in the year to May. However, rent values are still 0.2% lower than the recent peak in March 2020.
Between a mild recovery in rents and dwelling value falls, national rent yields increased 3 basis points over May. This also breaks a continued trend of record low yields across Sydney.
Days on market has increased in the 3 months to May across the capital cities, which may be a function of weaker market conditions amid COVID 19.
Vendor discounting across the capitals also deepened in the 3 months to May, reflecting value falls over the month.
At the 28 days ending 31 st of May, new listings had trended up from the beginning of the month.
However, there has been strong absorption of new listings by buyers, meaning total listings have continued to trend down.
The combined capital city markets have seen a year on year decline in total listings of 26.2%, while the combined regional areas are down 22.0% on the same time last year.
Clearance rates have partially recovered as restrictions on on-site auctions have been lifted.
Over May, fewer auctions were withdrawn and more vendors tested the market under normal auction conditions (rather than selling prior to the auction event).
Dwelling approvals, which are generally led by price signals, declined 1.8% in April in seasonally adjusted terms.
Over March, first home buyer participation as a portion of owner-occupiers was at its highest since January 2012.
Over March, investor participation declined in every state except South Australia, and the ACT.
The cash rate target was held at the effective lower bound through June, with increases in the cash rate unlikely for years to come.
Average fixed loan investor rates for new lending fell a remarkable 36 basis points from March to April.
Source: Corelogic
