House prices are showing signs of healthy recovery across all Australian capital cities as the national property market moves further away from the lows triggered by COVID-19 and subsequent lockdowns.
Dwelling values across the combined capitals were up 0.2% over October, with only Melbourne failing to post any positive gains. The combined regionals were also up 0.9% over the month, for a national monthly value increase of 0.4%.
House prices are now at their highest on record in Brisbane, Adelaide, Canberra and Hobart. And despite the monthly fall in Melbourne, the rate of decline has been easing there since mid-September according to CoreLogic. The Victorian capital significantly wound back many of its restrictions on movement and trading at the end of October.
"Restrictions and case numbers have been much higher in Melbourne compared to the rest of Australia and explain the bigger falls. However, open home inspections are now allowed in Melbourne and CoreLogic report that listings have since soared and that buyer activity is recovering," said CommBank Senior Economist, Kristina Clifton.
CoreLogic Head of Research, Tim Lawless, argued "it is clear that housing markets are responding to the stimulus of low mortgage rates and improved sentiment related to measures announced in the federal budget and the low number of new virus cases.
"Housing values are either rising or stabilising across each of the broad regions around the country. The volume of home sales is rising and inventory levels are being absorbed faster than the rate of new additions," he said.
Commenting on the strong performance in property markets outside the capitals, Lawless observed that "the newfound popularity of working from home is only one factor helping to support regional home prices. More affordable price points, lower densities and lifestyle factors, are also underpinning the relative strength across many regional areas of the country.”
Clifton pointed to improving figures for new housing lending and building approvals (up 5.9% and 15.4% respectively in September) to conclude "all three data releases relating to the housing market told a positive story". She did however also warn that "a weak labour market, falling rents and weak population growth are all headwinds facing the residential property market at present".
The RBA is expected to reduce the official cash rate when it meets tomorrow. Clifton noted that "changes in interest rates are a very important driver of dwelling prices".