John McGrath - Best Growth Suburbs On The East Coast During COVID-19
Home values in more than 1,200 metro and regional East Coast suburbs continued to grow in the first three months of the pandemic, according to newly released suburb data for the June quarter from CoreLogic.
In April, May and June, thousands of people had already lost their jobs, we had the national lockdown and opens and auctions were banned for several weeks…but prices in these suburbs kept rising.
It’s a reminder that property has a big advantage over every other investment asset class in an economic downturn. People don’t stop needing homes in a pandemic, a recession or when they lose their jobs. This makes the market resilient and supports property values.
Record low interest rates have also played a part, with five cuts since June 2019 enabling many people to upsize or buy their first home with historically low-cost borrowings. The virus has not stifled these aspirations.
Here are the highest growth suburbs across the East Coast for the June quarter.
Sydney (Median value down -0.8% June Qtr)
Regional NSW (Median value up 0.6% June Qtr)
Brisbane (Median value down -0.2% June Qtr)
Regional QLD (Median value down -0.1% June Qtr)
Melbourne (Median value down -2.3% June Qtr)
Regional Victoria (Median value up 0.6% June Qtr)
Canberra (Median value up 0.7% June Qtr)
Source: Market Trends, June quarter, suburbs with minimum 10 sales in June quarter, house and apartment data excludes suburbs with less than 20% of the relevant stock type, CoreLogic, published September 10, 2020
You might have noticed that two of the big banks upgraded their outlook for property prices this month.
Earlier in the year, Westpac predicted a -10% price fall nationally between April 2020 and June 2021, followed by 4% price rises per annum over the following two years. They now predict a -5% fall nationally by June 2021 and 15% gains over the next two years.
The Commonwealth Bank initially predicted a -10% fall peak-to-trough but have revised this to -6%.
Australian property is once again proving its resilience, even in challenging economic times.
The views expressed in this article are an opinion only and readers should rely on their independent advice in relation to such matters.
This article originally appeared in The Real Estate Conversation (September 28, 2020)
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