House prices fall for the first time in 11 months

Cited article by Jessica Yunn YAHOO NEWS FINANCE

1 June 2020

New data has shown the first monthly drop in property since June 2019, with Australian house prices dropping 0.4 per cent over May.
CoreLogic figures indicated domestic property market copping falls seeing with five of the
nations eight capitals losing value.
Darwin recorded the largest monthly fall of -1.6 per cent, followed by Melbourne at -0.9 per cent.

Source CoreLogic

But the drop of 0.4 per cent is much less damaging then what the experts expected.

Tim Lawless the head of CoreLogic research said, “Considering the weak economic conditions associated with the pandemic, a fall of less than half a percent in housing values over the month shows the market has remained resilient to a material correction,”
With restrictions being gradually of values for housing could be less harmful then expected.
The projectiles for the commonwealth Bank in mid May indecated house slumps as high as 32 per cent.

Some good news
But there are other indications that the property market is already starting to pick up: CoreLogic’s estimate of sales activity rebounded by 18.5 per cent in May after a drop of 33 per cent in April.
For eight weeks in a row, ANZ Roy Morgans consumer confidence index has risen for eight weeks continuously. Housing market activity will heat up as there is a rise in consumer confidence.
Now consumers are feeling better, households are much more equipped to make higher commitment decisions as buying or selling a home, ‘ Mr. Lawless said.

“A lift in housing market activity should also support broader economic activity, with housing turnover providing positive flow-on effects to other sectors including retail, construction and banking.”
A lifting of listing numbers and improvement in auction numbers is seen as the rising levels of consumer confidence continues.

Some bad news
In the long term the future looks uncertain. As government stimulus payments and repayment deferrals with expire and end.
“In the absence of these policies, housing values could come under some additional downwards pressure if economic conditions haven’t picked up towards the end of the year,” said Lawless.
The report showed that the capital cities were also less resistance to property falls then the country.
On a monthly bases, house values in regional towns remained flat, while in the capital cities there was a drop of -0.5 per cent.

Source CoreLogic

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