PHOTO: CoreLogic Property Pulse
The stringent government response to COVID-19 has undoubtedly placed the property market cycle at the cusp of another downswing. So far, property value declines have been fairly mild. Nationally, the May home value index results show that the dwelling market declined just 0.4% over the month, and preliminary indicators for June are showing the rate of decline has gathered some momentum through the month.
However, the Australian housing market is not one market, but a collection of many. Over the past few months, dwelling market performance has varied by region, in both a cyclical and structural way.
As per historic cycles, the most expensive parts of Sydney and Melbourne seem to be leading the current downswing.
Over the month of May, dwelling values in the top quartile of the Melbourne market (dwellings worth $959,500 or more) had fallen by 1.3%, compared with a 0.6% decline across the middle of the market, and a 0.3% decline in the lowest value quartile.
Across Sydney, the same period saw a decline in the highest market segment (where dwellings are worth over $1.35 million) of 0.6%, followed by a 0.4% decline across the middle of the market, and a slight increase in the lowest value segment of 0.1%.
The historic cycles across the upper, middle and lower market value tiers are presented below. The graphs suggest the more expensive parts of the Sydney and Melbourne dwelling markets have higher levels of volatility, and are at times a ‘first mover’ when it comes to the direction of price change.
SOURCE: CoreLogic – VIEW THE FULL REPORT HERE Property pulse – Biggest price falls amid COVID-19 – 26 Jun 2020
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