Australia’s residential property markets have stabilised over the past couple of months as social distancing measures ease in the majority of Australian states.
At the peak of COVID-19 fears in early April, many industry pundits issued gloomy predictions of price falls of 10%-20%. The uncertainty in the market gave rise to buyer caution; resulting in plummeting sales volumes over the 2nd quarter [1].
Fast forward to today, there are positive signs that conditions are improving as the respective states gradually re-open for business and we slowly return to normality.
Consumer Confidence
According to the Roy Morgan Consumer Confidence Survey, business and consumer confidence have both rebounded [2].
At the same time, ABS figures released on June 30th showed an increase in total payroll jobs between mid-May and mid-June [3].
Head of Labour Statistics at the ABS, Bjorn Jarvis, states:
“The recovery in payroll jobs between mid-April and mid-June represents around 30% of the jobs initially lost. Between mid-May and mid-June, the easing of restrictions saw payroll jobs increasing faster for the under 20s, up by 4.1%.”
Additionally, according to the Westpac Melbourne Institute Consumer Sentiment Survey, there was a substantial rebound in the general populations thinking about it being a good time to buy in May and June [4].
Property Market Activity
Looking at the last two weekends alone, even with lockdown Victoria, home auction markets produced solid results.
This is encouraging as the spring quarter is around the corner which is typically known for strong clearance rates for all capital cities [5].
Looking back to the month of June, collectively, new sale listings on Domain.com.au for the month are 19% higher than the previous four weeks and 37% higher than the four weeks before that.
Accordingly to June data, the national vacancy rate held steady at 2.2% [6].
Additionally, rental market have stabilised after an 80-basis-point rise in April. At a capital city level, each rental market has been affected differently by the COVID-19 crisis. In month on month terms, vacancy rates were broadly steady in Melbourne, Sydney and Brisbane, while Hobart, Perth and Darwin saw the biggest falls.
Key Takeaways
As the efforts to contain the spread of COVID-19 continue to improve, Australia is now faced with different challenges as they attempt to kickstart the economic recovery.
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Bradley Wearne - General Manager & Head of Research at Meridian Australia
P: (02) 9939 3249
References
[1] Domain.com.au
[3] ABS
[4] Westpac
[5] My Housing Market
[6] Domain.com.au