COVID-19 has started a property downturn in Melbourne and Sydney, according to results released by Corelogic.
May 2020 property downturn starts
CoreLogic Home Value Index results for May showed that five of the eight capital city regions dropped in value.
Property transactions had completely dropped off in April 2020 as the restrictions limited property buyers and sellers. But May sales activity bounced back by 18.5%.
But in terms of property prices, nationally prices fell by 0.4% with a combined capital fall of 0.5%.
But it was Sydney and Melbourne property prices that registered the biggest declines. Some areas are seeing a 10% drop compared to pre-COVID-19 prices according to anecdotes from buyer agents and others.
But CoreLogic is officially reporting that there are house prices falls. In May 2020, Sydney house prices fell 0.4% and Melbourne house prices fell 0.9%.
Looking at the other cities, Brisbane house prices dropped 0.1%, Perth prices declined 0.6% and Darwin prices went down 1.6%.
But it wasn’t all bad. Adelaide prices rose 0.4%, Hobart prices went up 0.8% and Canberra prices increased 0.5%.
CoreLogic head of research Tim Lawless said “Considering the weak economic conditions associated with the pandemic, a fall of less than half a percent in housing values over the month shows the market has remained resilient to a material correction. With restrictive policies being progressively lifted or relaxed, the downwards trajectory of housing values could be milder than first expected.”
There’s a long way to reverse the gains made since the federal election, but this could be the start. Some are predicting prices may only drop 5%, others see prices dropping as much as 20% or more. Time will tell.