Unit prices slip lower in every capital city over June quarter

author-avatar By on July 23, 2020
Unit prices slip lower in every capital city over June quarter

Photo by Maximillian Conacher on Unsplash

All major capital cities saw unit prices fall across the June quarter, while only Adelaide, Canberra and Hobart saw an increase in house prices, new research shows.

Domain's House Price Report for the June quarter reported that across the combined eight capital cities:

  • Median house prices fell by 2% to $804,602 (driven largely by Melbourne and Sydney) 
  • Median unit prices fell by 2.20% to $560,838

Annually, these median prices are still up 6.6% and 4.5% respectively. 

The findings follow another recent report by Domain showing that over the June quarter, unit rental prices experienced the largest fall in over 15 years. 

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
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
VariableMore details
REFINANCE IN MINUTES, NOT WEEKS

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

  • Refinance only. Fast online application
  • No Nano fees. Free 100% offset sub account
  • Mobile app, Visa debit card & instant payments
REFINANCE IN MINUTES, NOT WEEKS

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

  • Refinance only. Fast online application
  • 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.^

Rates correct as of October 19, 2021. View disclaimer.

According to Domain, price falls to date have been minimal from the pre-coronavirus March quarter to June, with Domain Senior Research Analyst Dr Nicola Powell saying this is the first quarter to show the impact of COVID-19 on house prices, reversing upward price swings in Sydney and Melbourne. 

"While most capital cities declined, the falls have been minimal to-date as unprecedented government stimulus, mortgage holidays, low stock levels and record low interest rates shield values from any significant declines, helping to retain stability in the housing market,” Dr Powell said. 

[Low interest rates: Compare low rate home loans

Amid lenders extending mortgage deferrals for those under serious financial strain, and the prolonging of the JobKeeper subsidy, Domain said the outlook for property prices largely depends on how well the economy is tracking when the financial stimulus ends. 

This is a similar sentiment to the one shared by NAB earlier in July, which found that despite an improved outlook, house prices could fall up to 15% from peak to trough - indicating the price falls recorded by Domain could continue in the coming quarters. 

"While prices have held up slightly better than expected, they have now declined for two consecutive months across the capitals and we expect this to continue for some time yet," NAB Chief Economist Alan Oster said.

"This easing in prices in Sydney and Melbourne comes after a very strong period in growth from mid-2019 where prices troughed."

Median house prices: Q2 2020

Notable house price swings could be seen in:

  • Melbourne, which recorded a 3.5% decline to $881,369
  • Sydney, which recorded a 2% decline in line with the national average 
  • Canberra, which recorded an impressive 4.1% rise in median house prices to $819,090 

“The ACT has not felt the economic impact of the COVID-19 crisis to the same extent as other cities, though the jobless rate has risen, it remains the lowest compared to other jurisdictions, supported by the high public sector employment base, where job losses have been minimal, and industries supporting the public sector," Dr Powell said. 

“A resurgence of first home buyers enticed by low interest rates and government incentive schemes have helped many on to the property ladder and supported housing activity.

"Stamp duty waivers on land and off-the-plan purchases, together with the HomeBuilder grant could continue to lure buyers.”

Median-unit-price-table.jpg

Source: Domain 

Median unit prices: Q2 2020

Every capital city recorded a fall in apartment prices, but the biggest falls were seen in: 

  • Brisbane, which saw a 4.10% fall in median prices to $375,285 
  • Perth, where prices fell 4.9% to $334,282 
  • Darwin, where prices are down 3.70% to $241,461

Of Perth's unit price fall, Dr Powell said the city has lost almost all of the strong gains it recorded over the previous quarter, pushing unit values down marginally 0.1% the year.

"This has created a window of opportunity for buyers, with values only 0.7% above last years trough but a staggering 20.7% lower than the mid-2014 peak," she said. 

“Perth’s housing recovery may have paused in recent months although prices remain relatively stable considering the economic impact of the current health crisis. Improving commodity prices, particularly the states two biggest exports gold and iron ore, will be a pillar of support for the economy.

"A rapidly shrinking supply of advertised listings will also help to rebalance the market."

Median-house-price-table.jpg

Source: Domain 


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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William Jolly joined Savings.com.au as a Financial Journalist in 2018, after spending two years at financial research firm Canstar. In William's articles, you're likely to find complex financial topics and products broken down into everyday language. He is deeply passionate about improving the financial literacy of Australians and providing them with resources on how to save money in their everyday lives.

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