Many of the property pessimists were disappointed when Corelogic reported its latest monthly statistics.
The CoreLogic home value index, covering the eight major capital cities, declined 0.5% in May, and while it was the first monthly fall since June last year, it showed how resilient our property markets are to the Covid-19 created crisis.
In fact over the last 12 months overall Australian property value growth was 9.7%.
But clearly this will flatten as we move forward.
In its latest property bulletin Westpac gave the following commentary on these statistics, suggesting the picture around turnover was slightly better than expected.
Here's what the report said:
Preliminary estimates last month pointed to a 45% collapse through March-April as lock-down measures came into effect.
This has been pared this back to a 37% drop with May sales pointing to about a 6% lift in the month.That reflects the relaxation of restrictions from around mid-month (in Sydney and Melbourne these had included outright bans on auctions and open homes).
Despite the gain, sales are still a third below pre-COVID levels and at 30yr lows as a share of the dwelling stock.
CoreLogic has flagged that these low volumes may see increased volatility in price measures – as such, some of the monthly price detail should be treated with more caution than usual.
Most major capital cities recorded falls in May, reflecting the common shock from the Coronavirus shut down.
The biggest declines were in Melbourne (–0.9%mth); Perth (–0.6%mth); and Sydney (–0.4%mth), with Brisbane prices steadier (–0.1%mth) and Adelaide recording a small 0.4% gain.
Annual price growth remains stronger in Sydney and Melbourne, both above 10%yr.
Both markets were coming into 2020 with prices rebounding strongly from their 2017-19 corrections (Melbourne prices pushing past previous peaks).
The Sydney price detail showed declines concentrated in upper and mid-priced houses, with lower priced houses and units posting slight gains.
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Melbourne's declines are also concentrated in the top end, with prices now down 2.2% in two months across the top 25% of properties by value (albeit coming off a strong 15.7% gain in the 12mths prior).
All segments recorded price declines in May.
Weakness in Brisbane and Adelaide was confined to units with houses posting slight gains across most segments.
Price slippage in Perth was broad based.
Overall, the May update was a mixed bag.
While the monthly price data confirms the start of a price correction, the figures on turnover were less negative – suggesting the direct disruption to activity has been less severe than earlier indicated and that it is already starting to ease.
That said, direct disruptions are not expected to be the main source of price weakness, which we instead expect to come indirectly from the shock to incomes and jobs (see our latest Housing Pulse for a full discussion).
With policy measures cushioning the shock and delaying the impact on key aspects of the market ('urgent sales' in particular) prices may be slow to fully reflect the shift.
However, as it comes through we expect declines to see prices nationally down 10% for the year.
Source: Westpac Property Bulletin - This contains general market commentary and doesn't constitute investment advice.
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