Australia Economic and Property Report 2020

Australia’s property market has managed to hold its value despite the doom and gloom predictions of what the COVID-19 shutdown would do to property prices.

The latest property market research report, ‘The PRD Australian Economic and Property Report 2020’ reveals on average, median house prices grew in capital city, metropolitan and regional markets in the 12 months to the first half of 2020.

PRD Real Estate Chief Economist, Dr Diaswati Mardiasmo ‘believes the market has shown great resilience despite everything that was thrown at it in the past 12 months’.

Despite extensive drought last year combined with devastating bushfires, the Australian property market was in recovery during the latter part of 2019 and the first two months of 2020.

Dr. Mardiasmo commented that, “whilst COVID-19  hit us swiftly this year and threw Australian economy and property markets into turmoil, things settled down within the property market quicker than initially thought”.

“That doesn’t mean everything has returned to normal yet, but as the PRD Australian Economic and Property Report reveals, Government stimulus has quickly helped prop up the property market and balance out some of the ill effects of the COVID-19 shutdown.”

The PRD report includes the latest independent property market data wrap up that covers, up to and including June 2020. Tis topical report not only captures the  latest impact of COVID-19, it also highlights how Australia’s unprecedented release of multiple fiscal and monetary policy assistance has created a market balance.

Key PRD findings include:

• On average, median house prices grew for capital, metropolitan, and regional markets in the 12 months to the first half of 2020. Regional markets performed the best; up by 3.4%. Capital city markets grew by 1.0% on average, led by Melbourne, Sydney, and Hobart.
• Consumer confidence has returned to pre-COVID-19 levels with confidence up by 23.9% in June 2020 after a plummet in April. Business confidence has also dramatically improved.
• Upgraders and first home buyers are taking advantage of available government grants and competitive offers from banks. Upgraders accounted for 42.0% of loans in June 2020 and first home buyers accounted for 21.0% of loans - an all-time historic high since 2013.
• New home sales increased by 77.6% as of June 2020, from a record low result in May. The HomeBuilder scheme is balancing the downturn in residential construction due to COVID-19.
• Vacancy rates hit their peak in April 2020 of 2.6%. However, this still means that 97.4% of rental properties are occupied.

“There is no doubt we are seeing signs of gradual improvement,” Dr Mardiasmo said.

“Uncertainty about the health situation and the future strength of the economy is making many households and businesses cautious. However, despite the curveballs the property market has been remarkably resilient, and demand has been stronger than many people anticipated.

“The key going forward will be increasing levels of employment, public and private investment and consumer confidence based on the ongoing impact of COVID-19. This sets the scene as we walk the tightrope to full economic recovery.”