Corelogic: Australian house prices fall for third month in July

SYDNEY: Australian home prices eased for a third straight month in July as the reimposition of a coronavirus lockdown in Victoria weighed on the Melbourne market and consumer sentiment generally.

Data from property consultant Corelogic out yesterday showed home prices across the nation fell 0.6% in July, from June when they dropped 0.7%. Values were still up 7.1% on July last year reflecting the market’s pre-pandemic strength.

Prices in the capital cities fell 0.8% in July, but again were still 7.9% higher on the year. Sydney saw values drop 0.9% in July, while Melbourne fell 1.2% and Brisbane 0.4%.

“The impact from Covid-19 on housing values has been orderly to-date, with Corelogic’s national index falling only 1.6% since the recent high in April and housing turnover has recovered quickly after it’s sharp fall in late March and April,” said Corelogic’s head of research Tim Lawless.

“Record low interest rates, government support and loan repayment holidays for distressed borrowers have helped to insulate the housing market from a more significant downturn.” The Reserve Bank of Australia has cut rates to just 0.25% and is expected to reiterate its willingness to do more if needed at a policy meeting today.

The conservative government of Prime Minister Scott Morrison is also under intense pressure to come up with fresh stimulus as restrictions in Melbourne get ever tighter.

The housing market had been one of the few bright spots in the economy pre-pandemic as booming prices bolstered consumer wealth. The housing stock was valued at A$7.2 trillion (US$4.97 trillion) in March before the market took a turn for the worse.

Lawless cautioned that with fiscal support set to taper from October and repayment holidays expiring at the end of March next year, the medium-term outlook was dark.

“Urgent sales are likely to become more common as we approach these milestones, which will test the market’s resilience,” he added.