Following what CoreLogic refers to as ‘five months of consistent declines in residential property values’, the national home value index is now showing positive month-on-month growth through October, posting a 0.4 per cent rise in housing values.
Every capital city, aside from Melbourne, has posted a rise in values over October.
Dwelling values increased by over 1 per cent in Brisbane, Adelaide, Hobart and Canberra, with housing values across all four capital cities reaching new record highs.
Melbourne is also showing a turning of the tides, with the rate of decline easing since mid-September, and October’s 0.2 per cent fall representing the smallest month-on-month value drop since COVID-19 started playing havoc with prices in April.
Given the surge in new property listings, and the easing of restrictions, November looks to be the month in which Melbourne makes its way towards a recovery.
Unit prices continue to drop across the country, showing a growing divergence between house and unit markets.
“The rise in capital city housing values over the month was entirely attributable to a 0.4 per cent lift in house values which offset the 0.2 per cent fall in unit values,” CoreLogic’s Head of Research, Tim Lawless explained.
“Through the COVID period so far, unit values have actually shown a smaller decline in values than houses, but this is likely to change.
“Almost two thirds of Australian units are rented, and rental conditions have weakened, especially in the key inner city precincts of Melbourne and Sydney. These areas have a higher concentration of unit stock, and historic exposure to demand from overseas migration.
“Low levels of investment activity, relatively high supply of unit stock in inner-cities and international border closures are key factors that imply units will under-perform relative to houses over the medium term” he said.
Regional housing markets are outperforming capital cities, proving mostly resistant to the flux seen in the larger markets.
According to Mr Lawless the past two months have reversed the previous mild falls across the combined regional areas.
“In the seven months since March, regional dwelling values are up 1.7 per cent while values across the combined capitals index have fallen by 2.3 per cent,” he noted.
“The newfound popularity of working from home is only one factor helping to support regional home prices.
“More affordable price points, lower densities, and lifestyle factors, are also under-pinning the relative strength across many regional areas of the country.
“Consumer confidence has consistently improved since the virus curve has once again flattened and Australians respond positively to measures announced in the federal budget.
“In October we saw an 11.9 per cent surge in the Westpac-Melbourne Institute consumer sentiment index, rising clearance rates and an increase in valuation for purchase orders. Alongside this we are seeing persistently low advertised stock, which has supported price growth,” Mr Lawless said.