Regional home prices continue to hold up, highlighting the increase in divergence between virus “hotspots” and the rest of Australia.
Lawless said the performance of Australia’s housing markets are intrinsically linked with the extent of social distancing policies and border closures, directly impacting labour market conditions and sentiment.
“We are likely to see a diverse outcome for housing markets around Australia looking forward, depending on how well the virus is contained and the region’s exposure to other factors such as its reliance on overseas migration as a source of housing demand.”
The index notes that regional markets continue to outperform their capital city counterparts across Australia’s largest states, likely due to their relatively low density and lower price points.
“Unlike their capital city counterparts, which usually receive 85 per cent of net overseas migration, most regional markets have avoided the drop in demand caused by the pause in migration.
“The normalisation of remote work through the pandemic could make proximity to major cities less of a factor in home purchasing decisions,” Lawless said.
Nationally, capital city rents held up better than housing values, according to Tuesday’s figures.
Capital city dwelling rents are down 1.4 per cent compared with the 2.3 per cent drop in dwelling values, for the period since March.
But despite the apparent resilience, Lawless says a more substantial performance gap is opening up between houses and units across the rental sector.
“Since the end of March, capital city house rents are down by a modest 0.3 per cent, while unit rents have fallen a more substantial 3.5 per cent with rents underperforming relative to house rents across every capital city,” he said.
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