The Melbourne property market took another value hit last month as the coronavirus pandemic appears to be impacting the Victorian capital harder than all other capitals, according to CoreLogic's latest figures.
Dwelling values were down 1.1% in Melbourne over June, with only Perth dropping by the same amount. But quarterly figures show an even more troubling picture for Melbourne, as the city's market fell by 2.3% over the three months to 30 June, during which new reported cases of COVID-19 in Australia steadily dropped from their March peak.
Parts of Melbourne are currently returning to hard lockdowns to combat a surge in new coronavirus cases.
Hobart and Darwin both saw some value growth in June, although their smaller property markets mean monthly movements tend to be more volatile.
"Price declines since the pandemic struck have been most pronounced in Melbourne, Perth and Sydney," said Gareth Aird, CBA Head of Australian Economics.
"It’s important to note, however, that our two largest cities also had the biggest prices rises in the year to March so the retracement needs to be put in context."
Commenting on the broader Australian property market, CoreLogic head of research, Tim Lawless, said "the downwards pressure on home values has remained mild to date, with capital city dwelling values falling a cumulative 1.3% over the past two months.
"A variety of factors have helped to protect home values from more significant declines, including persistently low advertised stocklevels and significant government stimulus," he said.
"Additionally, low interest rates and forbearance policies from lenders have helped to keep urgent sales off the market, providing further insulation to housing values.”
Lawless warned, however, that the longer-term outlook for property values remains highly uncertain. "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," he said.
"The longer term outlook for the housing market is largely dependent on how well the economy is tracking when these support measures are removed.”
Aird offered a slightly more upbeat vision of the future: "Whilst property prices are still likely to ease over coming months, it looks more likely that the falls will be more modest than initially anticipated. Auction clearance rates have rebounded to reasonable levels at around ~65% nationally. And it looks like the impact of significantly lower mortgage rates is largely offsetting the other forces weighing on dwelling prices."
He nevertheless clarified that CBA has not revised its forecast of a 10% fall in property prices nationally over the rest of 2020.