The top 7 ways COVID changed the Australian property market
The closed borders and construction delays were just some of the pandemic-induced effects on the local property market
2 min
CoreLogic research director Tim Lawless has revealed seven ways in which COVID changed Australian housing market trends.
“It was four years ago when the World Health Organisation declared COVID-19 a worldwide pandemic,” Mr Lawless said. “Since that time economic trends, including housing metrics, have been on a rollercoaster ride. Although lockdowns and the uncertainty of vaccination programs are well behind us, the legacy of COVID will be with us for a long time yet.”
1. Surging home values
Australia’s home price median surged 32.5% between March 2020 and February 2024, providing an incredible uplift of approximately $188,000 for homeowners in just four years. Housing values initially dipped when COVID hit but then surged 30.8% higher to a cyclical peak in April 2022. The market slumped 7.5% as interest rates rose, but as supply dried up and migration spiked, housing values entered a new growth cycle in February 2023 and have since risen 9.5% to date.
Mr Lawless said house values have increased by 37.9% while unit values have risen 16.5%, reflecting buyers’ preference for more space during COVID, and the ability to work from home allowing them to move to city outskirts or regional areas where they could afford a house. This led to regional home prices rising faster than capital city values. Today, regional prices are up a collective 47.6% compared with a 28.5% rise in capital city prices.
2. Rising rents
Mr Lawless said rental markets have tightened substantially, with vacancy rates holding around 1% and weekly rents surging. Nationally, rents have jumped 32.4% since March 2020, adding approximately $150 per week to the median weekly rent.
3. Interest rates
Mr Lawless said emergency low interest rates stimulated demand but in May 2022, when the Reserve Bank began increasing rates to fight inflation, market activity was quickly quelled.“So far borrowers have navigated higher mortgage rates much better than expected with mortgage arrears holding below pre-pandemic levels,” Mr Lawless commented.
4. Inflation
Mr Lawless said unprecedented peacetime fiscal stimulus, low interest rates and stronger global demand once COVID restrictions were lifted created higher inflation. This was exacerbated further by global supply chain disruptions due to the war in Ukraine. “Inflation is now beating forecasts, fuelling speculation we could see rate cuts later this year,” he said.
5. Low unemployment
Strong employment is seen as a crucial factor in keeping the property market stable. Once lockdowns ended and social distancing measures were eased, the jobs market tightened significantly. “Although labour markets are now loosening, RBA forecasts have the unemployment rate holding below 4.5% through to at least mid-2026,” Mr Lawless said.
6. Demographic trends
One factor keeping housing demand strong throughout the pandemic, despite closed borders, was the average household size shrinking as more people bought or rented houses, Mr Lawless explained. Since international borders reopened, record high overseas migration led by students has added massive new demand, particularly in the rental market.
7. Low supply
Low supply of homes for sale and fewer homes being built during COVID resulted in the unusual situation of housing values increasing at the same time as interest rates.
“Dwelling completions have held relatively flat through the pandemic to date, with supply chain constraints, materials and labour shortages, and a surge in construction costs creating a challenging environment for delivering new housing supply,” Mr Lawless said.
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Australia’s capital city housing markets have continued to record price growth, although higher interest rates and economic uncertainty are beginning to temper momentum.
3 min
Capital city home prices have continued to rise in April despite higher interest rates and ongoing uncertainty about the outlook for inflation and the global economy.
Growth rates, however, have eased, reflecting the usual subduing effect of the lengthy April holiday month.
The national capital city median house price increased marginally by 0.2% over the April quarter to $1,297,798 compared to the March quarter, according to the latest data from My Housing Market.
Annual national house prices are, however, 10.2% higher and have now increased for 14 consecutive months.
Most capitals reported house price increases over the month, with Brisbane and Perth the top performers, each higher by 1.3%, followed by Hobart and Darwin, both up 1.2%, Adelaide up 0.2%, with Sydney steady. Melbourne prices, however, fell 0.7%, while Canberra prices fell 1.7%.
Most also report strong annual house price growth in excess of 10%, with Perth, Darwin, Brisbane, and Adelaide clearly the highest, up by 25.7%, 21.6%, 20.0% and 14.2% respectively.
National unit prices were also higher in the April quarter than in the March quarter, rising by 0.5% to $728,459, and have now increased by 8.2% compared to the April quarter 2025 result.
Brisbane was the top monthly performer in April, with unit prices rising by 1.7%, followed by Perth up 1.0%, Melbourne and Canberra each up 0.9%, Adelaide up 0.6%, and Hobart up 0.1%. Sydney unit prices were steady over the month; however, Darwin unit prices were down 0.8%.
Similar to houses, Perth, Brisbane, Adelaide and Darwin continue to record the highest annual unit price growth to April 2026, at 30.1%, 27.8%, 12.9% and 11.8%, respectively.
Analysis
Capital city housing markets have generally reported higher home prices in April, although growth rates have eased compared to March.
Easing housing markets reflect the usual dampening effects of the lengthy April holiday month, although higher interest rates and increased uncertainty about the economic outlook have weighed on affordability and confidence.
Robust annual home price growth, however, continues for most capitals with Perth, Darwin, Brisbane, and Adelaide still reporting boomtime results.
Although 2026 is still set to see home price growth generally in most capitals, the rising spectre of further interest rate increases and elevated uncertainty over the outlook for inflation and the economy will continue to dampen affordability and confidence.
Brisbane, Adelaide, Perth and Darwin, however, are again set to lead capital city outcomes for both houses and units, but are unlikely to match the extraordinary 2025 results.
Brisbane, Perth and Adelaide continue to record higher median house prices than Melbourne, with Perth now closing in fast on Brisbane and set to lead all but Sydney.
Underlying drivers will continue to support overall housing market activity, although the outlook for RBA interest rates is more problematic, with inflation set to accelerate and economic activity to decline as a consequence of the recent sharp increase in oil prices.
The economy, however, remains strong, with a steady, still-low jobless rate, falling unemployment, continued robust job growth, and a high participation rate.
Housing demand continues to outpace a low and diminishing housing supply, and although high post-COVID migration levels have recently eased, numbers remain strong and will add to chronic housing undersupply, supporting high rents and low vacancy rates generally in capital city rental markets.
Following a period of easing in rental growth, the latest data continue to show extraordinarily low home rental vacancy rates and clear signs that rents are on the rise again.
High rents and higher prices continue to provide clear incentives for first-home buyers and investors chasing solid investment returns.
Ongoing government initiatives to support first-home buyers will increase demand and place further upward pressure on prices.
Capital city housing markets generally recorded higher house and unit prices over 2023, 2024 and surged over 2025, fuelled by rising buyer and seller confidence through sharp cuts to interest rates.
Although 2026 is again likely to see higher home prices, significant uncertainty has recently emerged about the near-term outlook for already-high interest rates and economic activity, which will generally dampen buyer and seller confidence.
Early signs are emerging in the recent weakening of home auction market clearance rates, particularly in Sydney and Melbourne.
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