SYDNEY, July 1 (Reuters) – Australian home prices slipped for a second month in June as coronavirus lockdowns and rising unemployment cooled a once red-hot market, though a sharp rebound in sales was a positive for economic activity.
Data from property consultant CoreLogic out on Wednesday showed home prices across the nation fell 0.7% in June, from May when they dipped 0.4%. Values were still up 7.8% on June last year reflecting the market’s pre-pandemic strength.
Prices in the capital cities fell 0.8% in June, but again were still 8.9% higher on the year. Sydney saw values drop 0.8% in June, while Melbourne fell 1.1% and Brisbane 0.4%.
“The downwards pressure on home values has remained mild to-date,” said CoreLogic’s head of research Tim Lawless.
“A variety of factors have helped to protect home values from more significant declines, including persistently low advertised stock levels and significant government stimulus.”
Record-low mortgage rates and banks’ willingness to defer loan repayments have also helped prevent a fire sale of properties, thus supporting prices.
The housing market had been one of the few bright spots in the economy as booming prices bolstered consumer wealth. The housing stock was valued at a hefty A$7.2 trillion ($4.97 trillion) in March before the market took a turn for the worse.
Lawless noted that a loosening in virus restrictions over the last couple of months had produced a rapid rebound in sales, which jumped 29.5% in June after a 21.5% gain in May.
Real estate activity and home listings had likewise risen sharply, while clearance rates at home auctions had rebounded from record lows in April.
That is a major plus for the economy since turnover produces spending, from furnishing, to electronics and real estate fees. It should also boost tax receipts to state governments that raise a lot of funds from stamp duty.
($1 = 1.4480 Australian dollars) (Reporting by Wayne Cole; Editing by Sam Holmes)