Despite experts suggesting thatwould see a sharp contraction in 2020, the latest data indicates the opposite has occurred. According to CoreLogic, house in value in 2020, finishing 3.0% higher globally. In December, the by 0.9%, with Darwin, the standout performer, finishing 2.3% higher for the month. While Perth, Brisbane, and Adelaide all increased by 1.1%. In December, Sydney and Melbourne, cities hardest hit by lockdowns throughout 2020, saw substantial gains of 1.0% and 0.7%, respectively, as Australia’s two major continue to turn the corner.
Throughout 2020, there was also a clear push towards the towards working remotely. While house prices have turned around, many dwelling values well off their record-high levels., reflected in the CoreLogic data. In December, house by 6.9% throughout the year. Areas along the central coast, regional QLD, and within a few hundred kilometers of the capital cities have seen the most interest in 2020, as people started to avoid CBDs amid ongoing lockdowns and a move
According to CoreLogic, four of the eight capitals still record dwelling values lower relative to their previous peaks. Melbourne home values are still -4.1% below their March 2020 peak, and Sydney dwelling values need to recover a further 3.9% before surpassing the2017 peak. -19.9% and -25.7% below their 2014 peaks.
One of the reasons thathave held up firmly over 2020 is because of reduced listings and transaction volumes. Early in 2020, transactions fell by around 40% when early and April. However, by the , transaction volumes had recovered to the point that by the same time in December, transactions were 8% higher than in 2019. The exact recovery was also seen with listing volumes that are still on the increase. When COVID first hit, many chose not to list their homes and took a wait-and-see approach. Comparatively, in November 2020, approximately 165,000 fewer properties were available for sale compared to the same time .
RBA Interest Rate Reductions
According to CoreLogic, one of the critical reasons for the recovery in house prices has also been the moves by the RBA to slash interest rates to record-low levels quickly. The year ended with the officialsitting at 0.1% and mortgage rates now under 2% for the first time. The have changed the dynamic, making buying cheaper than renting in many areas. Along with a host of Government incentives such as building bonuses and stamp duty relief, first-home have been one of the most active market segments, which has helped boost house prices. Although the property , CoreLogic notes that downside risks are worth considering, including the end of the Federal Government Stimulus programs such as JobSeeker and JobKeeper as mortgage holidays coming to an end.