The top 7 ways COVID changed the Australian property market
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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

By Bronwyn Allen
Tue, Mar 12, 2024 9:48amGrey Clock 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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The glass, steel and concrete structure by contemporary architect Ed Niles incorporates elements of the traditional design philosophy and the symbolism of the lucky No. 8

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A contemporary home designed with Feng Shui principles in Malibu that once asked $57.5 million will be auctioned in June.

The architectural home lies on the Pacific Coast Highway in Western Malibu, a surf spot known for its pristine beaches and celebrity owners. Concierge Auctions, which is handling the sale, expects bidding to open between $10 million and $19 million.

The long, narrow lot is about four-fifths of an acre and boasts 75 feet of private beachfront. Owner Wei-Tzuoh Chen, a California-based nephrologist, purchased the property in 2003 with his wife, Carrie Chen, for around $2.25 million. They originally intended to knock down the existing house and develop four condo units but then decided to keep the location for themselves as a vacation property.

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“I’ve lived in many beachfront houses in different parts of Southern California, but this is the finest sandy beach I’ve ever seen,” he said, distinguishing it from places where the water comes right up to the house during high tide.

The couple spent over six years building an 8,206-square-foot glass, steel and concrete residence with Malibu architect Ed Niles, who Chen said “spoke to his taste as a contemporary, not modern, architect.”

A native of Taiwan, Chen wanted to incorporate elements of Feng Shui into Niles’s signature futuristic design, inspired by the Guggenheim in New York City and the Broad in Los Angeles.

“I wanted a mini-museum in which to display my collection of Chinese antiques in a futuristic setting,” he said.

The property was previously listed in March 2023 at $57.5 million by Madison Hildebrand, president and CEO of the Malibu Life Team (and star of Bravo TV’s “Million Dollar Listing Los Angeles”), along with Jennifer Chrisman of Compass,  Wendy Wong of Treelane Realty Group and Katherine Quach of Treeline Realty & Investment. The agents are collaborating with Concierge Auctions, which will launch the auction on its online marketplace in mid-June. It is currently listed at $42 million.

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The residence juxtaposes organic with geometric shapes; curved and straight lines mingle inside and out.

As shown in an aerial photo, it consists of a series of circles, semi-circles, triangles and rectangles. “There are basically eight different-shaped structures in a configuration,” Chen said, explaining that the number eight symbolises good fortune in Chinese numerology.

Integrating Feng Shui elements was accomplished in numerous ways.

“Feng means ‘wind,’ and the idea is to have air flowing throughout,” Chen said. “Based on a survey of the site, Niles designed it so that when you open the door on the ocean side, the breeze will circulate into every area of the house.”

He added that the architect also designed the house around the sun’s movement, capturing the ever-changing light via over 45 custom skylights. “The architectural perspective of the house shifts every minute of the day.”

Feng Shui also refers to the flow of movement, which starts from the street-side security gate, where a short driveway descends to the house below. “The concept of the Chinese home is to be unassuming from the front and then to provide a wow factor when you walk inside,” he explained.

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Steps lead down to the glass-walled entrance with a soaring steel-paned glass ceiling. This spills into a cavernous space framed by massive architectural concrete walls and a floating bridge overhead. Two expansive sets of built-in stairs lead in different directions—one connects with a floating staircase to an upper level. The other flows into the ground floor living area and kitchen, with views to the horizon on two sides. A wall of frameless glass doors opens onto the back patio and an outdoor dining area.

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Two separate upper-level spaces—one rounded, the other a triangle—jut out over the patio, creating covered sitting areas below. The round space comprises the primary suite, featuring a wood-panelled sleeping area and a marble bathroom with a cylindrical Japanese stainless-steel tub overlooking the ocean. A 50-foot bridge and short flights of stairs lead to three more bedrooms with private decks.

“Every split level has its own wing with an en-suite bedroom, so they are private with no shared walls, and everyone gets to take advantage of the view,” Hildebrand said. “The guest house is separate with its own private outdoor space.”

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Two marine-coated red steel sculptures in the back play on the shapes and number themes. One is an immersive red triangular sculpture that doubles as an enclosure for a small dining table; the other is a humanistic red figure-eight piece. Chen confirmed that both are part of the sale, as is a larger-than-life green butterfly sculpture at the entrance.

Inlaid rectilinear stepping stones cut a diagonal across the lawn to the sandy beach, bordered by large rocks. Although it is technically open to the public, Hildebrand said it is not easily accessible or widely known.

Beyond the interiors, the outdoor entertaining spaces—counting an in-ground fire pit with stone crescent benches—can accommodate up to 100 guests. Six uncovered parking spaces are available in addition to a two-car garage.

“It also has a tide pool where you can see sea urchins, mussels and other marine life on the rocks in ankle-deep water at low tide, which is also very rare here,” Chen said. “That’s the reason I chose this lot over others. It’s such a unique location.”

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