Australia’s leading real estate analysis portal CoreLogic have released the housing market figures for August 2020, and one of the key findings of note, is that regional markets have continued to outperform their capital city counterparts across the largest states.
CoreLogic’s head of research Tim Lawless says there are a variety of factors helping to support regional housing market conditions.
“Unlike their capital city counterparts, which usually receive 85% of net overseas migration, most regional markets have avoided the drop in demand caused by the pause in migration.
Regional markets may also be appealing for their relatively low density and lower price points.
The normalisation of remote work through the pandemic could make proximity to major cities less of a factor in home purchasing decisions,” Tim Lawless CoreLogic
Agents Report Strong Demand In Regional Markets
Agents in key regional lifestyle areas such as the north coast of NSW, Sunshine Coast and Wide Bay regions in Queensland are reporting strong demand and buoyant markets, with a surge in enquiry from buyers from capital cities, in particular Sydney and Melbourne.
As we head into spring, the traditional ‘selling season’, it will be interesting to see how much of this lifestyle-driven momentum continues; the COVID-19 pandemic could very much be another trigger to a phenomenon in the marketplace that may shape the future direction of the property industry, swinging the pendulum towards key regional growth and lifestyle areas.
Is “the Curve” flatten?
CoreLogic reports that Australian home values recorded a fourth month of COVID-induced falls, recording a 0.4% fall in August. However, although housing values continued to trend lower than their pre-COVID highs – the rate of decline has eased over the path two months, with five of the eight capitals recording rising, or at least steady values through the month.
Not surprisingly Melbourne has fared the worst with a -1.2% drop in value for the month and a -3.5% value during the quarter; the lockdowns are taking the toll. Interestingly, the regional figures are much more positive recording a 0% drop in dwelling values over the month, as per displayed graph.
One of the other side-effects of COVID on property prices has been the stalling of overseas migration; this has had a larger impact on the two major capitals of Sydney and Melbourne, but certainly also effects other major cities.
The performance of housing markets is intrinsically linked with the extent of social distancing policies and border closures which also have a direct effect on labour market conditions and sentiment. It’s not surprising to see Melbourne as the weakest housing market considering the extent of the virus outbreak, and subsequent restrictions, which have weakened the economic performance of Victoria.”
“Looking forward we are likely to see a diverse outcome for housing markets around Australia, depending on how well the virus is contained and the regions exposure to other factors such as its reliance on overseas migration as a source of housing demand.” Tim Lawless CoreLogic
One thing that is clear in all the above is that the face of the Australian property market is changing. Now, more than ever you need to be making decisions that are right for your circumstances as the market shifts in a very different direction depending on location and job security.
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