Two-thirds of the monthly price results across Australia since the pandemic started have been positive. And if you remove Melbourne and Sydney from the equation, 70% of the month-to-month house price results have been positive since February
Let me explain what this means.
There are 15 market jurisdictions in Australia – eight capital cities and seven state/territory regional markets. I’ve looked at the house price result, up or down or no change, in the seven completed months after February.
That’s 105 monthly market results (15 x 7 months = 105 monthly results) and only 36% have been negative (a monthly decline in house prices) during the pandemic period. For Australia minus the two biggest cities, only 30% of the monthly results have been negative.
This means that we’ve had mostly positive house price results from March through September. It’s quite a different reality to the impression created by the reporting in mainstream media.
This is based on analysis of the month-to-month reports by CoreLogic. Another good source of property data, SQM Research, has generally similar outcomes though there are differences. To keep it simple, I’ll stick with the CoreLogic figures.
They show that house prices rose in most locations across Australia in September, with Sydney and Melbourne the exceptions. And keep in mind that the two big cities have been the exceptions right through this difficult period.
Six of the eight capital cities recorded increases in their house prices in September, headed by a 2% monthly rise in Darwin.
Prices rose also in most regional jurisdictions, led by a 1.2% increase in Regional South Australia. The “combined regionals” index rose 0.5% in September.
Despite six of the eight cities rising, the overall result for the “combined capitals” in September was a 0.2% decrease, with the average dragged down by negative results in Sydney (down 0.2%) and Melbourne (down 0.9%).
Six of the capitals – Sydney, Brisbane, Adelaide, Hobart, Canberra and Darwin – have higher price levels than at the start of 2020, notwithstanding the impacts of the pandemic.
The best results have occurred in Darwin (up 6.6%), Canberra (up 4.3%) and Hobart (up 4%).
Most of the state and territory regional markets have also recorded rises in 2020, led by Regional Tasmania (up 7.1%), Regional South Australia (4.6%) and Regional NSW (up 4%).
In annual terms, all capitals have recorded growth in their house price levels except Perth, with Sydney, Hobart and Canberra all rising by at least 7%. But the national leader is Regional Tasmania, where house prices have risen 10% in the past 12 months.
If we look at the month-by-month data, we can see how well most markets have done throughout the pandemic period.
The biggest cities – the ones worst-impacted by the pandemic – have had several consecutive months during which house prices have dropped, although in the year to date Sydney is still up 1.5% and Melbourne is down only 3.4%.
Elsewhere the results have been mostly positive for prices.
Canberra has produced some level of price growth in all of the seven months since the virus struck in Australia. Adelaide prices have dropped in only one of the past seven months. Brisbane, Darwin and Hobart have had just two down months.
Darwin in fact has risen 1.1% in August and 2% in September, to suddenly become the national leader on short-term growth.
In the markets outside the capital cities, Regional Tasmania has risen in all of the past seven months, while the regions of South Australia, Queensland and NSW have each had just one down month since the pandemic hit Australia.
In regional areas where there have been several months in which prices have declined, like Western Australia, the rate of decline has moderated to a large degree recently.
The overall situation for Regional Australia is a 0.5% rise in September, a 2.8% rise in the year to date and a 4.5% rise over the past 12 months.
If we look at the monthly figures a different way, we can see that June was the bottom of the Covid trough and since then things have been steadily improving for house price outcomes.
Looking at market jurisdictions that produced rises or no change in house price in each month, the positive outcome totals were: March 14, April 12, May 11, June 6, July 7, August 9 and September 10.
Because journalists don’t do in-depth analysis of price information, but simply report the generalised result contained in press releases, there is the ongoing impression of price decline throughout 2020.
The reality is really rather different. Throughout this wacky Covid phase, most market jurisdictions have managed to deliver price growth most of the time.
The economy may have fallen into recession, but the property market has not – particularly those markets beyond the two biggest cities, which is where most Australians live.
TERRY RYDER
