Prices hold steady

Bargain buys may be few as property values show resilience amid the COVID-19 crisis

BARGAIN hunters hoping for discounted property deals may be disappointed with early market indicators suggesting resilience in the face of the COVID-19 crisis.

CoreLogic’s dwelling value index for Australia’s combined capital cities, in which the Gold Coast is included under Brisbane, shows the change in value was still positive at 0.4 per cent in the 28 days up to April 21.

That momentum in positive growth rate has slowed from 1.1 per cent halfway through March, however, suggesting it is still likely that property values will fall amid the COVID-19 downturn.

Eliza Owen, Head of Australian Research at CoreLogic, reports the decline in momentum across property values has been mild relative to the impact on agent activity and listings volumes.

“It seems hard to digest that property values have not plummeted,” she said.

“With large losses in jobs and hours worked, the same level of income is not available to service high housing debt. This would presumably mean more people having to sell property, or a larger volume of distressed sales. And yet, there is so far no evidence of that.”

Harcourts Coastal agent Tolemy Stevens said an increasing number of qualified buyers competing for fewer properties was keeping prices steady.

“The one thing we do have is enough buyers, what we don’t have is enough properties to sell,” he said.

“We’re telling owners not to wait for a few more months and jump on the market now. The prices being achieved aren’t that far off what we would have got three months ago.”

Nerida Conisbee, chief economist with realestate.com.au, said COVID-19 was unlikely to improve housing affordability.

“We’re yet to see the impact of COVID-19 on house prices, and while we can safely assume that they won’t rise in the next few months, they won’t necessarily fall by a meaningful amount either,” she said.

“A drop in listings suggests bargain hunters may be disappointed.”

The areas most at risk are those with lots of rental apartments while premium suburbs and big homes on big blocks are still seeing high levels of interest.

“There are always some businesses and individuals that do well out of a downturn, and the same can be said for property,” Ms Conisbee said.

“Some markets will be hit but not every market will be impacted in the same way.”

Property is showing early signs of resilience amid the COVID-19 downturn.