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Summary
- Home prices are taking a breather after witnessing a continuous fall due to the COVID-19 outbreak.
- The CoreLogic index surged by 0.4 per cent against the previous month in October 2020.
- The lift in the housing price was witnessed across all major cities, except Melbourne, with many cities such as Sydney, Brisbane, Adelaide, and Perth demonstrating a robust recovery.
- Adelaide and Darwin witnessed the highest recovery in the housing price, with a 1.2 per cent increase in the dwelling value on a monthly basis.
- Regional housing market weathered the COVID-19 storm with regional housing growth outperforming the cities growth.
The property market seems to be recovering from the impact of the coronavirus pandemic-induced downturn. For the first time since the onset of COVID-19, house prices have witnessed an uptick across all major Australian cities, except for Melbourne.
Dwelling Values Surges Across Many Cities
CoreLogic index – which measures daily price movements of the housing prices across the continent, finally moved back into positive territory with a rise of 0.4 per cent on a monthly basis in October 2020.
The lift in the housing price was witnessed across all major cities, except Melbourne, with many cities such as Sydney, Brisbane, Adelaide, and Perth demonstrating a robust recovery.
However, while Melbourne witnessed a decline on a monthly basis, the trend rate of decline in the index eased in mid-September 2020 with 0.2 per cent monthly decline, marking the smallest drop since the COVID-19 downturn.
As on 31 October 2020, Adelaide and Darwin witnessed the highest recovery in the housing price with a 1.2 per cent increase in the dwelling value on a monthly basis for October 2020.
The increase was well mirrored across Hobert, Canberra and Perth, leading to a combined capitals increase of 0.2 per cent and a combined regional increase of 0.9 per cent.
On a monthly basis, dwelling values jumped over 100bps for each of the smallest four capital cities, leading to a surge in housing value to a record high across Brisbane, Adelaide, Hobart, and Canberra.
Regional Housing Market Vs Capital Cities
The regional housing market seems to be outperforming the capital cities with CoreLogic’s combined regionals index surging 0.9 per cent on a monthly basis in October 2020. Not just on a monthly basis, the regional space is outperforming the combined capital space on other major time periods as well.
For example, on a quarterly basis, the CoreLogic’s combined regional index surged 1.3 per cent, generating an alpha of 1.8 per cent against the CoreLogic’s combined capitals index.
Likewise, on an annual basis, the combined regional index surged by 4.8 per cent, outperforming the combined capitals index by 1.1 per cent.
Many industry experts believe that the surge in the regional housing price has been primarily supported by the work from home trend along with affordable price points, lower densities, and lifestyle-related factors.
The October 2020 CoreLogic index figures come ahead of RBA’s decision to bring down the interest rate to a historic low.
