How coronavirus hit Melbourne's property market while prices in other major cities went UP - and why buyers are turning to houses over inner-city apartments
- Melbourne suffered biggest fall of 0.4 per cent in median house prices in April
- CoreLogic data showed 0.3 per cent rise in Sydney, Brisbane, Perth last month
- Head of research Tim Lawless said Sydney, Melbourne biggest COVID-19 risk
- Starr Partners chief Doug Driscoll said investors cold on inner-city apartments
- Here’s how to help people impacted by Covid-19
The coronavirus lockdowns have hit Melbourne harder than any other property market, new data showed.
Victoria has been tougher than the other states in enforcing stage three restrictions, with police there even fining a learner driver for being in a car with her mother.
Median house prices in Melbourne fell by 0.4 per cent in April, making it the only Australian mainland state capital to suffer a decline after open-home inspections and public auctions were banned, CoreLogic data showed.
By comparison, equivalent prices for a detached home rose by 0.3 per cent in Sydney, Brisbane and Perth as values also increased in Adelaide (0.4 per cent), Canberra (0.1 per cent) and Darwin (1.1 per cent).
The coronavirus lockdowns have hit Melbourne (Flinders Street station during lockdown pictured) harder than any other property market, new data showed. Median house prices fell by 0.4 per cent in April, making it the only Australian mainland state capital to suffer a decline, CoreLogic data showed
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Apart from Melbourne, Hobart was the only other capital city to see a fall in mid-point values, with house prices down 0.2 per cent as Tasmania became an island state with its borders closed to the rest of Australia.
CoreLogic head of research Tim Lawless said the closure of Australia's border on March 20 to everyone but citizens and permanent residents was likely to hit Sydney and Melbourne more than any other state capital city.
'Sydney and Melbourne arguably show a higher risk profile relative to other markets due to their large exposure to overseas migration as a source of housing demand, along with greater exposure to the downturn in foreign students, stretched housing affordability and already low rental yields that are likely to reduce further on the back of rising vacancy rates and lower rents,' he said.
Doug Driscoll, the chief executive of real estate agent Starr Partners, said investor interest had waned for inner-city apartments in the Sydney market where he operates, over concerns there would be fewer international students in the rental market.
'The inner-city apartment market is partly fuelled, underpinned by investors,' he told Daily Mail Australia on Friday.
By comparison, equivalent prices rose by 0.3 per cent in Sydney and Brisbane (pictured are two men practising social distancing at the Mount Coot-Tha lookout)
CoreLogic head of research Tim Lawless said the closure of Australia's border on March 20 to everyone but citizens and permanent residents was likely to hit Sydney (a near deserted Opera House pictured) and Melbourne more than any other state capital city
'We have seen investor numbers during the COVID crisis come back by 60, 70 per cent - falling demand, that will have an impact on prices.'
Banks could also be more reluctant to provide investor loans for inner-city units.
'If we're seeing a bit of a "rental crisis" - a lot of that is caused by things like students,' Mr Driscoll said.
'If we've got fewer overseas students at the moment, then there are fewer people to rent properties and that has an impact on vacancy rates.'
In April, median apartment prices rose by 0.6 per cent in Sydney but fell by 0.2 per cent in Perth and by 0.4 per cent in Canberra.
Darwin had the biggest increase in median apartment prices of 3.1 per cent, as the Northern Territory recorded the fewest COVID-19 cases and flagged reopening pubs in just a fortnight from now.
Mr Driscoll said outer suburban homes in general were likely to hold their value better during the COVID-19 pandemic as owner-occupier buyers with families continued to need a house.
'Houses are going to sell better and maintain prices better than inner-city apartments through all this,' he said.
'They're more families, they're expecting another child, the people that we're seeing and speaking to at the moment and dealing with, they're the ones moving through necessity.'
