House prices in wealthy, waterfront suburbs of Australia’s big cities are falling at a faster rate during the coronavirus downturn.
Upmarket areas of Sydney, Melbourne, Brisbane and Perth suffered much steeper than average falls in June, CoreLogic data showed.
CoreLogic’s head of research Tim Lawless said Australia’s COVID-induced economic contraction was hurting richer areas more, repeating what happened between 2017 and 2019 when tighter lending rules sparked another property market downturn.
‘Higher-value markets tend to be more reactive to changes in the environment, having led both the upswing and the downturn over previous cycles,’ he said.
House prices in wealthy, waterfront suburbs of Australia’s big cities are falling at a faster rate during the coronavirus downturn. Pictured is the Gwawley Bay section of Sylvania Waters in Sydney’s Sutherland Shire, which suffered a 1.7 per cent property price fall in June – almost double the city-wide average of 0.8 per cent
Melbourne’s inner east was Australia’s worst-performing real estate market in June, with dwelling values falling by 2.1 per cent.
This was much steeper than greater Melbourne’s 1.1 per cent plunge in house and apartment values – the third consecutive month of decline.
In early 2019, the inner-city area near the Yarra River was Australia’s worst performing housing market but was among the first to recover.
Upmarket areas of Perth along the Swan River last month also suffered a 2.1 per cent plummet in property prices – a level much more severe than the city’s overall 1.1 per cent drop.
Sydney’s north shore, which takes in Sydney Harbour and Middle Harbour, suffered a 1.5 per cent monthly decline in property prices.
The Sutherland Shire in the city’s south, which includes Cronulla and Sylvania Waters on the Georges River, suffered an even more disastrous 1.7 per cent decline in June.
Melbourne’s inner east was Australia’s worst-performing real estate market in June, with dwelling values falling by 2.1 per cent. This was much steeper than greater Melbourne’s 1.1 per cent plunge in house and apartment values – the third consecutive month of decline. Pictured is a terrace at East Melbourne
Greater Sydney by comparison suffered a 0.8 per cent fall in house and unit prices.
Australia’s worst property markets
Perth inner: DOWN 2.1 per cent
Melbourne inner east: DOWN 2.1 per cent
Perth north east: DOWN 1.9 per cent
Brisbane inner city: DOWN 1.8 per cent
Sydney Sutherland: DOWN 1.7 per cent
Sydney north shore: DOWN 1.5 per cent
Melbourne south east: DOWN 1.2 per cent
Melbourne outer east: DOWN 1.2 per cent
Melbourne inner: DOWN 1.1 per cent
Sydney Parramatta: DOWN 1.1 per cent
Source: CoreLogic dwelling price falls in June across price segments within statistical areas
Brisbane’s inner-city suburbs along the Brisbane River copped a 1.8 per cent decline in home values.
This was significantly worse than the Queensland capital’s 0.4 per cent drop last month.
Daniel Walsh, the director of the Your Property Your Wealth buyers’ agent, said demand was still holding up in outer-suburban areas of Brisbane.
‘During coronavirus, we remained active in middle-ring locations that offer houses around the $400,000 to $500,000 mark, and mostly had the pick of the crop,’ he told Daily Mail Australia.
‘Now, listings are still constrained, but the number of active buyers has surged two- to three-fold compared to March and April.
‘In fact, we have have seen up to 30 groups going through just one open home because of the lack of stock with first-home buyers and owner occupiers the most common buyer type.’
First-home buyers intending to live in their property made up 32 per cent of borrowers in April, Australian Bureau of Statistics data showed.
They can also buy a home with only a five per cent deposit as taxpayers guarantee the rest of the 20 per cent deposit, under the federal government’s $500million First Home Loan Deposit Scheme.
Another 10,000 places opened up this week and are available during the next year.
Mr Walsh said first-home buyers were particularly keen on houses in outer suburban areas.
Upmarket areas of Perth along the Swan River (pictured) last month also suffered a 2.1 per cent plummet in property prices – a level much more severe than the city’s overall 1.1 per cent drop
‘A good solid home under $475,000 has a lot of competition, due to the five per cent first home buyers’ deposit scheme and the stock levels being significantly reduced over the past three months,’ he said.
Australian property markets bleed
SYDNEY: down 0.9 per cent to $1,010,426
MELBOURNE: down 1.3 per cent to $802,551
BRISBANE: down 0.4 per cent to $557,265
ADELAIDE: down 0.2 per cent to $476,639
PERTH: down 1.1 per cent to $459,376
HOBART: up 0.4 per cent to $516,600
DARWIN: up 0.4 per cent to $470,136
CANBERRA: up 0.1 per cent to $716,150
Source: CoreLogic Home Value Index for June 2020 of median house prices
‘On average we have seen between 20 to 40 groups through an open home on properties under $475,000 with multiple offers on these properties selling in the first open home for list price and in some cases over.’
Home owners are more reluctant to sell in some cities more than others, with SQM Research data showing Sydney listings fell by 1.6 per cent in June to 29,590.
Brisbane’s tally of properties on the market remained steady at 28,814.
In Melbourne, the number of listings last month rose 2.7 per cent to 39,494.
SQM Research managing director Louis Christopher said the coronavirus malaise had led to more property discounting.
‘Of course, we know that conditions are far from normal. And this is illustrated in the fall in vendor asking prices for the month,’ he said.