Data from CoreLogic has helped illustrate how capital city dwelling values across Australia have responded differently to the pressure of the COVID-19 pandemic.
According to Eliza Owen, CoreLogic head of research for Australia, the ACT dwelling market has been the “clear ‘winner’” as it saw a 1.3% increase in value between June and August as national dwelling values moved the opposite direction, declining 1.4% over the same period.
“While it may seem counterintuitive that prices are rising across the ACT amid a global pandemic, the property market is actually performing as may be expected when the cash rate is reduced,” Owen explained.
“Research from the RBA has found that for every 1 percentage point reduction to the cash rate, property values may increase 8% over the following two years.”
In addition to the varied movements evidenced across the country, there has also been significant divergence evidenced within the ACT in terms of property values and rent values.
“As property values continued to rise through July, rent values have declined half a percent since the onset of the pandemic,” said Owen.
“This may have to do with better conditions across higher paid jobs, where people are more likely to buy property and have a mortgage.”
However, while the ACT property market has been in an upswing since August last year and is currently the “breakaway performer” within the country, Owen has warned it’s not a guaranteed success story.
“There is a chance that this market will experience a delayed downturn as the economic repercussions of Melbourne’s second lockdown become more broad-based,” she said.
“Investor demand, while already low relative to Australia-wide participation, may also be impacted by lower rent values.
“As a result, prolonged growth in this market will be subject to how quickly Australia can supress new virus cases, and see recovery in the labour market.”
