World News – AU – House prices rise nationally in November, further gains are expected in 2021

WA lowers restrictions for travelers from NSW and Victoria, from Aug.. December to enter the state

Real estate analysts no longer anticipate a 10 to 20 percent drop in house prices and expect prices to continue rising through early next year if the virus stays under control in Australia.

After rising in October, CoreLogic’s national index saw a second consecutive monthly increase in November, with home values ​​increasing by zero. 8 percent per month and 3rd. 1 percent during the year.

Eliza Owen, Head of Housing Research at CoreLogic, said this shows a « new recovery trend » after a 2. Australian home values ​​drop 1 percent between April and September.

« Sydney, Melbourne and Brisbane are up less than 1 percent for the month, while all the smaller capitals are up more than 1 percent. « 

Ms. Owen said that while « it seems difficult to reconcile the biggest recession we have seen since the 1930s with a surge in house prices, » it was not uncommon for house values ​​to rise during negative economic shocks.

Often, when unemployment rises, the reserve bank lowers interest rates, which makes it cheaper for people to buy houses.

The RBA is expected to keep the cash rate at its record low when it announces its decision later today.

Reserve bank governor Phillip Lowe previously said that the policy rate is unlikely to fall to zero, but that the policy rate is likely to remain low for three years.

« People who still have a job and are able to buy real estate find that they have access to more money and that debt is cheaper, » said Ms. Owen.

Rental markets have deteriorated significantly, particularly in downtown Sydney and Melbourne, where those markets depend heavily on international students and people in the food and accommodation sectors who lost their jobs during the crisis.

While house values ​​have led to an increase in the index of combined capitals in the last three months (increase 1). 1 percent), the unit values ​​of the capital fell by 0. 6 percent over the same period.

National property prices continue to withstand the otherwise devastating effects of the coronavirus pandemic, but how long will this take? asks Nassim Khadem.

Melbourne’s single market is the exception. The unit values ​​there recorded an unexpectedly small decline throughout the entire COVID period and showed a clearer recovery trend in recent months.

« Unit rents have fallen nearly 8 percent since the pandemic started. And in Sydney, they’re down almost 7 percent. « 

« We know that about 80 percent of people who first come to Australia from overseas are renters – many of them are international students, » Ms. Owen said.

Given that Corelogic was among the real estate analysts and economists who falsely predicted that house prices would fall 10 to 20 percent, Ms. Owen was reluctant to provide a figure for future house price increases.

But she said house prices would rise early next year due to lower interest rates, higher consumer sentiment and government stimulus measures.

A 40 percent drop in Australian house prices is an « extreme but plausible » scenario, according to the RBA.

She said that if people were more optimistic, they would be more likely to make a high engagement decision, like buying a house.

« An increase was expected in the course of 2021. I don’t know exactly what the number will be, « said Ms. Owen.

« It is tempered by things like whether there is another surge in COVID-19 cases, how quickly we see a vaccine being distributed, how trade relations develop in China, and how quickly we get people back to it Can bring work.

The RBA has modeled a theoretical 50 percent decline in house prices, stating that Australia’s economic recovery will be « unpredictable and uneven ». .

The stocks in the real estate market are about 20 percent lower than last year and 24 percent below the five-year average.

Real estate agents say COVID-19 has sparked a new wave of requests from Australians interested in moving from capital cities to regional areas.

The number of sales completed has remained relatively stable since July, with increased sales activity outside of Victoria offsetting the sharp decline in the state’s home sales due to the recent lockdown.

At the national level, CoreLogic’s sales estimates over the past three months were approximately 1 percent higher than the prior-year period due to strong performance in regional areas.

The clearance rates in November were around 70 percent, well above the decade average of 61 percent.

« Selling time is shortened, the amount that sellers have to discount also decreases. So the indicators are that it is more of a seller’s market, « said Ms. Owen.

Regional house values ​​were 1. 4 percent higher in November (compared to a 0. 7 percent increase in capital city values).

Regional Queensland has led the rise in value for the past three months, posting a 3. 2 percent more, followed by regional NSW, where the values ​​have risen 3. 1 percent.

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AEST = Australian Eastern Standard Time, 10 hours before GMT (Greenwich Mean Time)

Real estate price index, CoreLogic, Housing