The top 7 ways COVID changed the Australian property market
Kanebridge News
Share Button

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.



MOST POPULAR
11 ACRES ROAD, KELLYVILLE, NSW

This stylish family home combines a classic palette and finishes with a flexible floorplan

35 North Street Windsor

Just 55 minutes from Sydney, make this your creative getaway located in the majestic Hawkesbury region.

Related Stories
Property
Winning neighbourhoods where home values rose most in FY24
By Bronwyn Allen 18/07/2024
Property
Jennifer Lopez and Ben Affleck Officially List Their Massive Beverly Hills Mansion for $68 Million
By BECKIE STRUM 12/07/2024
Property
The faster pathway to building wealth is no longer how much you earn, investors believe
By Bronwyn Allen 11/07/2024
Winning neighbourhoods where home values rose most in FY24

We reveal the No. 1 areas for price growth in each capital city

By Bronwyn Allen
Thu, Jul 18, 2024 3 min

Home values across Australia rose by a median 8 percent in FY24, delivering the equivalent of $59,000 in new capital growth to the two-thirds of the population that owns a home, according to CoreLogic data. Investors received total returns of 12.2 percent over the year, including capital gains and gross rental income.

Very tight supply and demand in most capital cities except Melbourne and Hobart was a significant driver of the capital growth, with the smaller and more affordable capital cities of Perth, Brisbane and Adelaide experiencing the most price appreciation over the year. A lack of properties for sale trumped the usual dampening effect of higher interest rates.

As usual, some areas outperformed their city’s median growth benchmark. Here are the top SA3 areas for capital growth in each capital city of Australia in FY24. SA3 areas are large suburbs, or districts incorporating clusters of suburbs, with more than 20,000 residents.

 

Sydney

Home values across Sydney rose by a median 6.3 percent in FY24. The No. 1 area for growth was Mount Druitt. Its median value rose by 13.96 percent to $859,939. Mount Druitt is located 33km west of the CBD. It incorporates the suburbs of Mount Druitt, Ropes Crossing, Whalan and Minchinbury. The Mount Druitt community is very multicultural with almost one in two residents born overseas. It is home to many young families, with the median age of residents being 33 compared to the NSW median of 39.

 

Melbourne

Home values across Melbourne rose by a median 1.3 percent in FY24. The top area for capital growth was Moreland-North with 4.71 percent growth. This took the district’s median home value to $746,488. Moreland-North includes the suburbs of Hadfield, Pascoe Vale and Glenroy. It’s a multicultural community with a particularly large contingent of residents with Italian ancestry. One or both parents of 66 percent of residents were born overseas, according to the 2021 Census.

 

Brisbane

Home values across Brisbane rose by a median 15.8 percent in FY24. The No. 1 area for growth was Springwood-Kingston in Logan City. Its median value swelled by 25.55 percent to $710,569. Springwood-Kingston is approximately 22km south of Brisbane CBD. It incorporates the suburbs of Springwood, Kingston, Rochedale South and Slacks Creek. It is a multicultural community with one or both parents of 55 percent of the residents born overseas, according to the 2021 Census. More than 15 percent of residents have Irish or Scottish ancestry.

 

Adelaide

Home values across Adelaide rose by a median 15.4 percent in FY24. The best area for capital growth was Playford in Playford City. Its median value soared by 19.94 percent to $530,991. Playford is approximately 40km north of Adelaide. It incorporates the suburbs of Elizabeth Downs, Elizabeth Grove, Angle Vale and Virginia. It is home to many young people under the age of 40. The median age of residents is 33 compared to the state median of 41.

 

Perth 

Home values across Perth rose by a median 23.6 percent in FY24. The No. 1 area for growth was Kwinana in Kwinana City. Its median value skyrocketed by 33.19 percent to $618,925. Kwinana is approximately 37km south of Perth CBD. It includes the suburbs of Leda, Medina, Casuarina and Mandogalup. Henderson Naval Base is located here and there is a significant community of servicemen and ex-servicemen living in the area. It is home to many young families, with the median age of residents being 33 compared to the state median of 38.

 

Canberra

Home values across the nation’s capital rose by a median 2.2 percent in FY24. The best area for capital growth was Weston Creek. Its median value rose by 5.24 percent to $937,740. Weston Creek is approximately 13km south-west of the CBD. It includes the suburbs of Weston Creek, Holder, Duffy, Fisher and Chapman. Approximately 43 percent of residents have a bachelor’s degree, which is on par with the ACT median but much higher than the national median of 26 percent. Household incomes are about 35 percent higher than the national median. Almost one in five residents work in government administration jobs.

 

Hobart

Home values across Hobart fell 0.1 percent in FY24. The top performing area for capital gains was Sorell-Dodges Ferry with 2.78 percent growth. This took the area’s median home value to $615,973. Sorell-Dodges Ferry is approximately 25km north-west of Hobart. It incorporates the suburbs of Richmond, Sorell, Dodges Ferry, Carlton and Primrose Sands. The area has a large community of baby boomers and retirees, with the median age of residents being 43 compared to the Australian median of 38.

 

Darwin

Home values across Darwin rose by a median 2.4 percent in FY24. The No. 1 area for growth was Litchfield. Its median value moved 3.21 higher to $672,003. Litchfield is about 37km south-east of Darwin and includes the suburbs of Humpty Doo, Acacia Hills and Southport.  It has a high proportion of middle-aged residents, with the median age being 39 compared to the territory median of 33. About 12 percent of residents are Indigenous Australians. The biggest industries are government administration and defence. Median household incomes are about 35 percent higher than the national median.

 

MOST POPULAR
11 ACRES ROAD, KELLYVILLE, NSW

This stylish family home combines a classic palette and finishes with a flexible floorplan

35 North Street Windsor

Just 55 minutes from Sydney, make this your creative getaway located in the majestic Hawkesbury region.

Related Stories
Property
The faster pathway to building wealth is no longer how much you earn, investors believe
By Bronwyn Allen 11/07/2024
Money
Global Charities Say Using Companies’ Carbon Offsets to Lower Emissions Undermines Climate Targets
By YUSUF KHAN 04/07/2024
Property
These little known suburbs are offering the highest rental yields around the country
By Bronwyn Allen 25/06/2024
0
    Your Cart
    Your cart is emptyReturn to Shop