House prices rise in every capital city except Melbourne in October

author-avatar By on November 02, 2020
House prices rise in every capital city except Melbourne in October

Photo by Thicia Luiza Zuqui on Unsplash

After five months of declines, Australian house prices have posted growth of 0.4% in October, according to CoreLogic.

Each capital city recorded an increase in home values, except Melbourne, which saw a 0.2% decline over the month. 

Despite the decline, the downward trend in the Victorian capital has been easing since mid-September, with the 0.2% decline the smallest month on month drop since the COVID-induced downturn. 

With private inspections now permitted, new property listings have surged and clearance rates have listed, with CoreLogic predicting house prices in Melbourne will soon recover. 

Buying a home or looking to refinance? The table below features home loans with some of the lowest variable interest rates on the market for owner occupiers.

Lender
Advertised rate Comparison rate Monthly repayment Rate TypeOffsetRedrawOngoing FeeUpfront FeesLVRLump Sum RepaymentAdditional RepaymentsPre-approval
VariableMore details
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
VariableMore details
WIN YOUR HOME LOAN INTEREST FREE

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • WIN your home loan interest free and save up to $1.1 million. Refinance by 29 October. T&Cs apply.
  • Refinance Only. Fast online application, refinance in minutes, not weeks.
  • No Nano fees, Free 100% offset sub account. Mobile app. Visa debit card & instant payments.
WIN YOUR HOME LOAN INTEREST FREE

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • WIN your home loan interest free and save up to $1.1 million. Refinance by 29 October. T&Cs apply.
  • Refinance Only. Fast online application, refinance in minutes, not weeks.
  • No Nano fees, Free 100% offset sub account. Mobile app. Visa debit card & instant payments.
VariableMore details
YOU COULD WIN $100k TO PAY DOWN YOUR LOAN*

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • For a chance to win $100K towards your home loan, apply with Athena before Oct 31 & be approved by Dec 15
  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
YOU COULD WIN $100k TO PAY DOWN YOUR LOAN*

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • For a chance to win $100K towards your home loan, apply with Athena before Oct 31 & be approved by Dec 15
  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
VariableMore details
AN EASY ONLINE APPLICATION

Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)

  • Unlimited additional repayments
  • Unlimited free redraws
  • Optional 100% offset can be added for $120 p.a.^
AN EASY ONLINE APPLICATION

Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)

  • Unlimited additional repayments
  • Unlimited free redraws
  • Optional 100% offset can be added for $120 p.a.^
VariableMore details
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services

Rates correct as of September 28, 2021. View disclaimer.

CoreLogic’s Head of Research Tim Lawless said the October results show a stark contrast between house and unit market performance. 

“The rise in capital city housing values over the month was entirely attributable to a 0.4% lift in house values which offset the 0.2% fall in unit values," Mr Lawless said.

"Through the COVID period so far, unit values have actually shown a smaller decline in values than houses, but this is likely to change.”

“Almost two-thirds of Australian units are rented, and rental conditions have weakened, especially in the key inner-city precincts of Melbourne and Sydney."

Change in dwelling values as at October 31, 2020

Month 

Quarter 

Annual 

Median value

Sydney

0.1%

-0.6%

8.8%

$860,955

Melbourne

-0.2%

-2.2%

0.7%

$666,240

Brisbane

0.5%

0.9%

3.5%

$510,353

Adelaide

1.2%

2.0%

4.4%

$455,425

Perth

0.6%

0.9%

0.0%

$456,267

Hobart

1.0%

1.6%

6.5%

$498,073

Darwin

1.2%

3.9%

2.8%

$398,910

Canberra

1.0%

1.9%

6.8%

$656,739

Combined capitals

0.2%

-0.5%

3.7%

$638,264

Combined regional

0.9%

1.3%

4.8%

$403,181

National 

0.4%

-0.1%

3.9%

$559,254

Source: CoreLogic

Mr Lawless said unit markets were suffering as a result of little to no overseas migration, low levels of investment, and high stock levels. 

Regional markets continued to outperform the capitals, even withstanding much of the COVID-related downturn. 

In the seven months since March, regional dwelling values are up 1.7%, while values across the capitals have fallen by 2.3%. 

“The newfound popularity of working from home is only one factor helping to support regional home prices," Mr Lawless said.

"More affordable price points, lower densities and lifestyle factors, are also under-pinning the relative strength across many regional areas of the country.”

Mr Lawless added the lift in home values coincided with a range of other improved indicators in recent months. 

“Consumer confidence has consistently improved since the virus curve has once again flattened and Australians respond positively to measures announced in the federal budget," he said. 

"In October we saw an 11.9% surge in the Westpac-Melbourne Institute consumer sentiment index, rising clearance rates and an increase in valuation for purchase orders.

"Alongside this we are seeing persistently low advertised stock, which has supported price growth.“

Despite a surge in new listing numbers, total advertised stock remains close to record lows, with new listings increasing by 25.2% but total stock levels growing by less than 1%. 

House rents and unit rents diverge 

The pandemic period has seen a substantial divergence between house and unit rents. 

Between March and October, capital city unit rents were down a cumulative 4.8%, while houses recorded a 0.4% rise in rents.

This divergence continued through October with the monthly data showing a 0.7% drop in capital city unit rents while house rents are up 0.5%.

The difference between house and unit rental performance was most significant in Melbourne and Sydney where, since March, unit rents are down 6.6% and 5.8% respectively while house rents have seen a more mild reduction of around 1%.

Mr Lawless said the divergence could be attributed to a combination of supply and demand factors. 

“Both cities have a multiyear history of significant supply additions to the high-rise unit sector where the large majority of properties are owned by investors," he said.

"From a demand side, the evaporation of overseas migrants, including foreign students, has led to a sudden and material drop in the number of renters requiring accommodation.

"Additionally, weaker labour market conditions across industries where workers are more likely to rent than in any other sector have further impacted rental demand.”


Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:

  • The big four banks are: ANZ, CBA, NAB and Westpac
  • The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2020. They are (in descending order): Great Southern Bank, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
  • The larger non-bank lenders are those who (in 2020) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.
  • If you click on a product link and you are referred to a Product or Service Provider’s web page, it is highly likely that a commercial relationship exists between that Product or Service Provider and Savings.com.au

Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site.

In the interests of full disclosure, Savings.com.au, Performance Drive and Loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.

*Comparison rate is based on a loan of $150,000 over a term of 25 years. Please note the comparison rate only applies to the examples given. Different loan amounts and terms will result in different comparison rates. Costs such as redraw fees and costs savings, such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.

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Alex joined Savings.com.au as a finance journalist in 2019. He enjoys covering in-depth economical releases and breaking down how they might affect the everyday punter. He is passionate about providing Australians with the information and tools needed to make them financially stable for their futures.

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