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Sydney, Melbourne house prices drop despite easing of COVID-19 restrictions on open homes, auction
Sydney and Melbourne house prices have fallen by $10,000 in one month despite the easing of coronavirus restrictions on open homes and public auctions.
Property prices in Australia’s biggest cities have been resilient throughout the COVID-19 pandemic so far.
While the worst of the lockdowns may be over, the effects on real estate are only just beginning, with worse forecast to come as six-month mortgage repayment holidays end.
Median house prices in Sydney fell by 0.6 per cent in May, marking the first monthly drop in a year, CoreLogic data showed.
Median house prices in Sydney fell by 0.6 per cent in May, marking the first monthly drop in a year, CoreLogic data showed. Home values dropped by almost $10,000 in just four weeks to $1.017million. Pictured is a unit that was sold at Cronulla in Sydney’s south
Home values dropped by almost $10,000 in just four weeks to $1.017million, even though capital city auction clearance rates surged from 30.2 per cent in late April to 62.7 per cent in the week to May 24.
Melbourne’s mid-point house prices fell by an even more dramatic 1.1 per cent in May, with values falling for the second consecutive month to $809,274 – or also by almost $10,000.
The Victorian metropolis was the only capital city market to suffer a fall in April but in May, property prices also dropped in Sydney, Perth and Darwin.
The slide in house prices occurred even though state governments allowed public auctions and open home inspections to resume in May with social distancing and crowd limits in place.
The news about the coronavirus effect on property was released amid speculation the federal government would offer $40,000 handouts to first-home buyers to either build or renovate as part of a possible $4billion package.
Prime Minister Scott Morrison confirmed his Treasurer Josh Frydenberg was working on a stimulus measure to prop up the home construction sector.
‘We’ve been looking closely at the residential building sector,’ he told Sydney radio 2GB broadcaster Ben Fordham.
Melbourne’s mid-point house prices fell by an even more dramatic 1.1 per cent in May, with values falling for the second consecutive month to $809,274 – or also by almost $10,000
‘We’re not making announcements on that today but the Treasurer’s been doing some good work with some of the states as well who are interested in working on those issues.’
CoreLogic head of research Tim Lawless said the end of six-month mortgage repayment holidays in September could spark a further decline in house prices later this year.
‘Eventually, government stimulus will wind back and borrower repayment holidays will expire,’ he said.
‘In the absence of these policies, housing values could come under some additional downwards pressure if economic conditions haven’t picked up towards the end of the year.’
In Brisbane, house prices were last month flat at $559,975 while in Perth, they fell 0.6 per cent to $461,366. Pictured is a house inspection at Bulimba in May 2020 as COVID-19 restrictions were eased
The early stages of coronavirus are particularly affecting New South Wales, with the value of construction work diving by 17.3 per cent in the year to March.
This was the worst annual decline in 19 years, the Australian Bureau of Statistics data showed.
The COVID-19 pandemic is also affecting house prices in other capital cities, although to a lesser extent.
In Brisbane, house prices were last month flat at $559,975 while in Perth, they fell 0.6 per cent to $461,366.
Darwin suffered the biggest drop of 0.9 per cent, with median house prices now at $473,861.
House prices, however, continued to rise in some cities with Hobart’s median value rising by 0.8 per cent to $514,496.
Canberra’s equivalent price last month rose 0.7 per cent to $716,663 in the national capital where the federal public service is the main employer.
The early stages of coronavirus are particularly affecting New South Wales, with the value of construction work diving by 17.3 per cent in the year to March. This was the worst annual decline in 19 years, the Australian Bureau of Statistics data showed. Pictured is Sydney’s city centre
Source: Daily Mail australia
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