THE DEVIL IS IN THE DETAIL

Wednesday 08 Jul 2020

First National Real Estate Cairns Central says the latest CoreLogic house price data shows the devil is in the detail when it comes to housing market statistics. While the key take-out is that house prices fell 0.7% nationally last month, the statistic is heavily skewed by larger falls happening in Sydney and Melbourne’s luxury suburbs.

Prices declined marginally across five capital cities but actually increased in three. Sydney, Melbourne, Brisbane, Adelaide & Perth saw minor value falls, whereas Hobart, Canberra and Darwin each rose subtly. By any measure, the movements were small and, when considering the 12-month change in home values, they in fact reflect double-digit growth. Sydney & Melbourne, which are considered barometers for the national housing market, finished the financial year up by 13.3% & 10.2% respectively.

First National Real Estate Cairns Central principal, David Forrest, says if you contrast this with the upper quartile in Sydney & Melbourne, it’s evident where the real market shifts are occurring.

‘In Sydney, Mosman fell 2.5%. Melbourne’s Malvern fell 4.8%, so when you calculate a national average for house prices, the result is skewed in a way that makes it look worse than it really is. For Australians looking to buy homes in low to middle price ranges, there’s been very little change as a result of the Coronavirus pandemic’ says David Forrest.

‘Looking at the most affordable quartile, Sydney’s home actually increased by 0.2%, or $1,770 at the June median price. In Melbourne, the decline was 0.5% for the month, or $1,373 down from the June median. Considering the expert economist pandemic March predictions of 30% declines, Australia’s housing market is demonstrating resilience and a very different trajectory’ says David Forrest.

While some homeowners are worried about what will happen when government assistance packages are intended to be wound-back in September, David Forrest says it is good news that the Banks have extended their assistance and that it would be unlikely the government would not adapt or extend its assistance, if considered critical, as it would be inconsistent with its management of the COVID-19 crisis thus far.

Based on levels of pre-listing activity across the First National Real Estate network, housing stocks look set to increase in spring but job security and overall economic confidence will be the deciding factor in what happens with home values in the final months of 2020.

Cairns 12-month figures to June show that house prices rose between 0.4% -1.5% and units showed no gain or loss. Other statistics show that there was a 5.8% reduction in listings on the market for the financial year ended June 2020 and that days on market fell by 7 and vendor discount reduced marginally. In general terms the market showed little change.

Issued by: First National Real Estate Cairns Central and Cairns Beaches.

For further information contact:

David Forrest, Principal, First National Real Estate Cairns Central, on 0418897640