The latest CoreLogic Home Value Index recorded a drop in home values across each of the country’s five largest capital cities from the end of May to June 30.
Perth and Melbourne recorded the largest declines (1.1 per cent), while the indices for Hobart, Canberra and Darwin each recorded a subtle rise in values over the month.
Despite values being down in June, CoreLogic’s estimate of home sales in June was up a further 29.5 per cent following a revised “surge” in sales activity during May driven by real estate agent activity, which CoreLogic said was now tracking higher than the same time last year.
“The downwards pressure on home values has remained mild to-date, with capital city dwelling values falling a cumulative 1.3 per cent over the past two months,” CoreLogic head of research Tim Lawless said.
“A variety of factors have helped to protect home values from more significant declines, including persistently low advertised stock levels and significant government stimulus.
“Additionally, low interest rates and forbearance policies from lenders have helped to keep urgent sales off the market, providing further insulation to housing values.”
CoreLogic said recent home value falls represented an interrupted upswing across most regions, reflected in high annual growth rates: the twelve month change in home values remained in positive double digit territory across Sydney (13.3 per cent) and Melbourne (10.2 per cent).
“The only capitals where values show declines on an annual basis are Perth and Darwin, but even across these cities, home values were early into a recovery phase pre-COVID,” Mr Lawless said.
“While it is encouraging to see lenders have recently hinted at an extension in their repayment leniency policies, the government stimulus will eventually taper and banks will require borrowers to repay their loans.
“The longer term outlook for the housing market is largely dependent on how well the economy is tracking when these support measures are removed.”