As the Australia property market braced for the worst as COVID-19 spread across the globe, the effects have so far been fairly tepid in the grand scheme of things.
Perhaps as expected, new data released by CoreLogic shows that Sydney and Melbourne’s most expensive areas are those to have been affected the most in terms of property values.
Across Australia, the month of May saw a decline of 0.4% in the average house value, and as mentioned previously, maybe not as much as one would have thought when the cloud of COVID-19 first loomed.
The data from May shows that dwelling values in the top 25% of Melbourne (dwellings worth $959,500 or more) and Sydney (dwellings worth $1.35 million or more) fell by 1.3% and 0.6% respectively – more than the middle 50% and the lowest 25% brackets of valued dwellings.
This shows that the areas with the highest house price value in the country’s two largest cities, are also the most susceptible to a fluctuation in property value.
The two cities have 7 out of the top 10 areas across Australia to have seen the steepest decline, with some notoriously affluent areas such as Melbourne’s Inner and Inner Eastern suburbs making an appearance, as well as North Sydney and its Northern Beaches.
Possibly more surprisingly, the number one spot, shared with Melbourne’s Inner South with 2.2%, was Mandurah in Perth, which has seen a consistent downward spiral in recent times, with the economic effects of COVID-19 only magnifying the tumbling values.
The full extent of the damage caused by COVID-19 on Australia’s property market is yet to be seen. From an economic point of view, when an event as seismic as COVID-19 occurs, the impact isn’t always as abrupt as first thought, what we will perhaps see though, as data over the past couple of months has suggested, is a prolonged period of time where house prices will struggle and slide.