Despite falls in March/April, house values over 12 months still 10%+ up

Village and aged care operators are concerned that house price falls are impacting people selling the family home to downsize or enter aged care.

This is a valid concern but the facts don’t reflect a ‘crisis’ just yet.

CoreLogic reports that house prices across the country fell in May by 0.4%, led by Melbourne at -0.9%. Sydney was -0.4%. However, Hobart grew 0.8% with Canberra and Adelaide also slightly positive. (See table above).

They point out that Sydney house prices are still up 4.2% this year (in five months) and Melbourne 1.6%.

Year on year, Sydney is 15.6% ahead and Melbourne 12.2%.

Housing sales did drop 28% in April but regained 21% in May.

Sector operators should take comfort in these facts:

• Traditional family homes are predominantly ‘free standing’ and will be in higher demand post-COVID compared to apartments and medium density, given the isolation experience
• New construction has been hit hard – impacting competitive supply
• Working from home is now more acceptable, making middle and outer suburbs more attractive
• While immigration has been the driver of capital city housing demand, and overseas entrants have been largely eliminated, this impacts lower end properties like apartments, not freestanding
• And most importantly, 90%+ of Australians still have jobs but displaying far lower discretionary spend – they and therefore the banks are awash with cash, and restless. Their all-important confidence is rising.