The Melbourne property market stayed in positive territory in the lead up to the Covid-19 lockdown, growing 1.4% in the 12 weeks ending April 30.
This result gave Melbourne an annual year-on-year increase in property value of 12.4% – a strong result beaten only by Sydney and Darwin, according to the latest data CoreLogic.
Despite the blow to Victoria’s economy created by coronavirus, these latest results show Melbourne’s property market entered the crisis in an incredibly strong position and is likely to rebound once economic activity and confidence returns.
The city’s annual result outstripped the national average (8.3%). It would have been even better if values from the high-end of the market had not fallen 0.8% in the April quarter as economic and social concerns took hold.
Regional Victoria values also stayed in positive territory for the year ending April 30, rising 3.7% compared with the corresponding period in 2019. Its quarterly result was also good news for owners and investors, rising 2.4% in the 12 weeks to April 30.
However, signs of Covid-19 concerns began to emerge in April when values in Melbourne tipped slightly into the negative at -0.3%.
That ended a stellar run that took the city to record highs in property values in March.
Settled sales in the April quarter were 10.3% up on the corresponding period in 2019 – another sign of the confidence that existed.
The days-on-market measure showed properties were sold in an average 26 days compared with 43 days in the 2019 April quarter.
CoreLogic estimates a 40% fall in completed sales in April due to owners pulling their properties off the market. National auction clearance rates also went south by 50% for the same reason.
One early sign of the Covid crisis taking its toll has shown up in the rolling 28-day count of total national sales listings to May 3. They fell to 156,714 against totals since 2016 that have consistently hovered around 230,000.
New listings across Australia dropped to 20,500 in April, down from around 40,000 just a couple of months before.
New listings for Melbourne are up 35.5% compared with the corresponding period last year. There are also 25.1% more listings.
As your real estate agent, we’ve seen a drop in activity. But as the state begins to open up economically and now that auctions and open for inspections are permitted again, we’re noticing early signs of pent-up demand.
Good buying certainly exists right now, but the market could regain strength quickly. Owners of existing property who have been thinking of upgrading should appreciate that they stand to make financial gains right now.
We recommend that if you’re thinking seriously about buying a first property or upgrading, you should give us a call.
Overall, the data shows that Melbourne’s property market entered the lockdown in a strong position. There is ample evidence to suggest the city and state’s property markets will pick up pace quickly when confidence and business activity return.
