Regional property markets recorded an average of 3.4 per cent median house price growth in the 12 months to June this year, effectively triple the growth of the nation's capital city markets for the period.
Capital city markets recorded the least growth with a one per cent uptick for the period, according to the Australian and Economic Property report released by PRD.
PRD Real Estate chief economist Dr Diaswati Mardiasmo says regional markets were slightly more insulated from economic shocks in the face of Covid-19, with less reliance on international trade and a more affordable housing market.
Regional Tasmania and New South Wales led the median house price growth, with 9.8 per cent and 5.3 per cent in the 12 months to the first half of 2020.
This was followed by regional Victoria, at 4.4 per cent and the Northern Territory at 2.2 per cent.
| 1st Half 2019 | 2nd Half 2019 | 1st Half 2020 | |
|---|---|---|---|
| NSW | $1,158,700 | $1,242,100 | $1,300,200 |
| QLD | $554,400 | $567,400 | $561,200 |
| VIC | $815,500 | $876,600 | $859,300 |
| WA | $538,700 | $538,800 | $527,200 |
| TAS | $504,700 | $521,900 | $556,400 |
| NT | $489,900 | $462,600 | $472,500 |
| SA | $542,300 | $533,200 | $517,700 |
| ACT | $984,300 $ | $974,200 | $1,000,500 |
^For the year to June. Source: PRD Australia Economic and Property Report 2020
Australia's capital city markets recorded an average one per cent median house price growth over the 12 months to June 2020.
For context, national capital city price growth for the same year prior, clocked up an average of 6.7 per cent.
But Mardiasmo says capital city markets fared better than expected, with growth led by Melbourne, Sydney, and Hobart.
“Capital city markets did experience the most tumultuous ride throughout Covid-19, however they held value and finished on a balance, recording an average of 1 per cent median house price growth in the 12 months to the first half of 2020,” she said.
Melbourne and Sydney led the price growth with 14.3 per cent and 10.8 per cent median house price growth in the 12 month period.
Hobart followed with 9 per cent growth and then Brisbane at 3.6 per cent.
| 1st Half 2019 | 2nd Half 2019 | 1st Half 2020 | |
|---|---|---|---|
| NSW | $494,400 | $516,900 | $520,600 |
| QLD | $441,100 | $451,600 | $441,300 |
| VIC | $399,000 | $413,300 | $416,600 |
| WA | $329,100 | $321,800 | $327,300 |
| TAS | $307,700 | $324,900 | $338,000 |
| NT | $413,600 | $370,800 | $423,800 |
| SA | $298,100 | $303,100 | $304,700 |
^For the year to June 2020. Source: PRD Australia Economic and Property Report 2020
“Uncertainty about the health situation and the future strength of the economy is making many households and businesses cautious. ...despite the curveballs, the property market has been remarkably resilient, and demand has been stronger than many people anticipated,” Mardiasmo said.
In the June quarter, about three months into the Covid-19 economic slowdown, Corelogic's Eliza Owen said data showed regional centres had seen higher capital growth than the capital city regions.
ABS data shows the value of new loan commitments for Australian housing fell a sharp 11.6 per cent in May, driven by falls for housing loans in New South Wales and Victoria.
Australia's rental market has also shifted in focus during the height of Covid-19 due to related job losses.
Recent SQM research shows regional areas have taken a stronger hold of the rental market, with vacancies outside the cities tightening and the biggest quarterly drops seen in regional New South Wales, followed by Queensland and Victoria.
In his budget update last week, treasurer Josh Frydenberg tipped a major fall in net migration, revealing Australia’s numbers could fall from 154,000 in 2019-2020 to 31,000 in 2020-2021.
Frydenberg said the unemployment rate—currently at 7.4 per cent—is anticipated to hit 9.25 per cent in the December quarter.
