COVID-19 sees Australia’s most expensive suburbs suffer the greatest property value declines

COVID-19 restrictions have resulted in the loss of many of the wealthiest suburbs of Sydney and Melbourne.

CoreLogic, a property research company, has released new research showing that the nation’s most expensive markets in Sydney and Melbourne are leading the property downswing. They are down 0.6 and 1.3 percentage point respectively.

Mandurah, Perth’s most affected suburb, saw a drop in property values of 2.2 percent between March 31 and March 31.

It was closely followed (down 0.7%), by Melbourne’s Inner South, North Sydney, Hornsby, and Hornsby (down 0.7%), and the Mornington Peninsula (0.5%).

Eliza Owen, CoreLogic’s Head Research, stated that although the overall decline in value was mild it would be the more expensive markets that would be most affected.

Ms Owen stated, “The more expensive areas in Sydney and Melbourne’s housing markets are subjected to higher levels of volatility” and can be a “first-mover” in terms of price changes.

Research by the RBA shows that higher-priced properties are more likely to be volatile or reactive to changes in cash rates.

“The performance of the property markets during COVID-19 suggests that the high end market may also more vulnerable to economic shocks,”

Ms Owen stated that Mandurah’s biggest price drops are due to a long-term downward trend. The data suggests that the house prices in the area are already vulnerable.

“Unsurprisingly, Melbourne’s inner city has seen the greatest decline across the metropolitan area, and the past two month have seen a decrease in values across certain high end markets in Sydney such as North Sydney and the Inner West,” Ms Owen stated.

Ms Owen said that while inner-city market values experienced a slight decline due to pandemics but she predicts that an extended extension of international border closures will cause further losses.

Ms Owen stated, “As the downturn continues,” we will likely see continued falls within inner-city market which previously relied on international immigration for new home demand.

“However, the wider economic downturn will affect housing demand. Mild price drops are likely spread and lead to a more widespread decline over the next twelve-months.

These are the top 10 regions where property prices fell during COVID-19

Rank:	State:	Region:	Change in dwelling values:
1	WA	Mandurah	– 2.2 per cent
2	VIC	Melbourne – Inner South	– 2.2 per cent
3	VIC	Melbourne – Inner	– 1.8 per cent
4	VIC	Melbourne – Inner East	– 1.8 per cent
5	WA	Perth – South East	– 1.8 per cent
6	VIC	Melbourne – Outer East	– 1.2 per cent
7	QLD	Ipswich	– 1.2 per cent
8	NSW	Sydney – North Sydney and Hornsby	– 0.8 per cent
9	NSW	Sydney – Inner West	– 0.7 per cent
10	NSW	Sydney – Northern Beaches	– 0.7 per cent

Australia’s May 2020 Median Property Prices*

City	Annual Change	Median Value
Sydney	+ 14.3 per cent	$885,159
Melbourne	+ 11.7 per cent	$686,798
Brisbane	+ 4.3 per cent	$508,386
Adelaide	+ 1.8 per cent	$441,184
Perth	– 2.1 per cent	$443,669
Hobart	+ 6.2 per cent	$486,056
Darwin	– 2.6 per cent	$393,939
Canberra	+ 5.1 per cent	$637,279
National	+ 8.3 per cent	$557,818