Unit Prices Fall Over June Quarter


The effects of Covid-19 have begun to filter through the housing market with house and apartment prices weakening nationally over the June quarter.

According to the latest Domain house price report, house prices dropped by 2 per cent and unit prices by 2.2 per cent nationally over the quarter.

Every major capital city saw unit prices fall with only Adelaide, Canberra and Hobart enjoying an increase in house prices during the period.

Domain senior analyst Nicola Powell said price falls to date had been minimal from the pre-coronavirus March quarter to June with significant government stimulus, mortgage holidays and low interest rates supporting home values.

“Price expectations have changed rapidly in recent months, with more vendors adjusting asking prices downwards to seek a timely sale,” Powell said.

“With lenders extending mortgage pauses for those under serious financial strain, and the JobKeeper subsidy being extended, the outlook for prices largely depends upon how well the economy is tracking when fiscal stimulus ends.”

Median house prices

Capital CityJun-20Mar-20Jun-19QoQYoY
Combined Capitals$804,602$820,685$755,065-2.0%6.6%

^ Source: Domain

Across the capital cities, the biggest reverberation in the market was felt in Melbourne, with house prices slipping 3.5 per cent and units 1.7 per cent, the deepest quarterly fall of any major city.

It has meant the first prices falls for Melbourne since early 2019, following record high house price achieved last quarter, with $32,000 stripped from house prices and $9,000 from units over the quarter.

“[Melbourne's] rebound was swift as restrictions eased, confidence lifted from the April lows, vendors returned, and more buyers decided it was a good time to purchase—nationally rising to a six-month high,” Powell said.

“The second lockdown will stall this momentum temporarily.”

Substantial prices falls were seen across the city, predominately in Melbourne's inner east and inner south, while the outer areas remain stable or have risen.

The report noted that over June, 13.4 per cent of sellers reduced asking prices, five times higher than the same time last year.

Property prices in Sydney have also retreated with house prices down 2 per cent and units 1.9 per cent, or $23,000 and $14,000 respectively.

“The proportion of properties discounted [in Sydney] is a leading indicator of price movement, evidence that further price weakness lies ahead,” Powell said.

In June, 15.2 per cent of sellers reduced asking prices, three times higher than the same time last year.

Median unit prices

Capital CityJun-20Mar-20Jun-19QoQYoY
Combined Capitals$560,838$573,636$536,847-2.2%4.5%

^ Source: Domain

In Brisbane, house prices fell 1.4 per cent over the quarter, the first quarterly fall seen in a year and the steepest in almost nine years. Unit prices also declined by 4.1 per cent.

“[Brisbane] house prices remain higher compared to last year, marking seven-and-a-half years of annual capital growth,” Powell said.

“Although this has reversed in the June quarter, the fall in prices to date has been minimal considering the economic aftermath of border closures and shutdowns.”

Domain highlighted coastal cities such as the Sunshine Coast and Gold Coast where housing values outperformed Brisbane over the June quarter.

Gold Coast houses pushed to a new record of $660,000 following a 1.5 per cent quarterly growth, while houses on the Sunshine Coast nudged marginally lower.

Unit values held across both cities over the quarter, with Sunshine Coast units at the record achieved last quarter.

Canberra house prices bucked the downward trend seen in most other cities and continued to rise over the June quarter.

The strong quarterly growth across the public sector city, supported by a high proportion of government employees and low job losses, pushed median house values to a record high, breaking the $800,000 mark.

Unit prices, however, slipped 1.3 per cent over the June quarter to a median of $453,750, a marginal fall compared to the steep decline of the previous quarter.

Hobart’s house prices were also pushed to new heights over the quarter.

“For the first time on record, it is now more expensive to purchase a house in Hobart than it is in Perth and Darwin,” Powell said.

“House prices are 57.3 per cent and units 70 per cent higher than five years ago, providing home owners and investors the strongest capital growth of all the major capitals during this time.”

Mirroring the slip in house and unit prices home lending by both owner occupiers and investors recorded the biggest monthly fall on record over May.

New loan commitments for housing fell by 11.6 per cent over the month—the worst on record, while the value of new loan commitments for owner occupiers fell 10.2 per cent and new loans for investors fell 15.6 per cent—the lowest level since 2002.

Recent clearance rates have been haphazard over recent weeks with Melbourne returning to lockdown and half of the city's scheduled auctions being pulled while Sydney clearance rate to its highest level in almost two months.


Join 50,000+ property professionals who subscribe to our email briefings.

Australia’s most trusted source of property news and intelligence.

Show Comments
advertise with us
The Urban Developer is Australia’s largest, most engaged and fastest growing community of property developers and urban development professionals. Connect your business with business and reach out to our partnerships team today.
Article originally posted at: