June 2020

This is the 23rd in a series of articles summarising monthly news and happenings in Sydney real estate, and more broadly.

And we’re back!

For June, the Core Logic housing update discussed how, with the COVID-19 isolation rules relaxing, many of the anchors on the housing market over the last few months have effectively been removed. Using strong words for a dyed-in-the-wool pragmatist, Tim Lawless stated that the downward pressure on housing values could well be milder than first anticipated.

For May, Sydney housing values were reported as down by an average 0.4% which, according to Lawless, demonstrates the market’s resilience even during the pandemic. The different quartiles of the market experienced different degrees of value fall with the uppermost quarter of the market falling by 0.6% (compared to a 16.5% rise over the last 12 months) and the lowest quarter fell by only 0.1% (compared to a 9.6% rise over the last 12 months).

National values remain 8.3% higher than they were a year ago, with the steep growth trajectory at the beginning of the year only blunted by the pandemic. This is demonstrated through other figures as well: the auction clearance rate ‘bounced back’ from a low of about 30% in April, to about 63% in May. Overall. Lawless described the current phase as being one of resilience and recovery, following the weak economic conditions and pandemic disruptions of the last few months.

In a similar vein, Domain focussed on a number of Sydney residences selling way over reserve, and cited a revised AMP forecast of a 10% property value fall (originally forecast as a 20% fall). They also noted the Sydney and Melbourne clearance rates are back to the mid downturn rates of last year. The real challenge, Domain predicts, will be in October when the government economic supports start to get rolled back.

We get a small mention in the article, with Chris providing some context on the sale for 32 King William Street, Greenwich, which he auctioned. Well done, Chris!

In other news, Steve Waters wrote – perhaps presciently – for the Real Estate Conversation about the proud history of the Viking investor. Standing defiantly at the bow of the storm of catastrophe, keeping a steely eye on the horizon; ignoring the surrounding crash of the storm and focussing on the goal. If it had been dated in the last week of June it could possibly have been in the realm of 20/20 vision in hindsight, but since it was from the beginning of April… respect! A nice reminder about the pitfalls of panicking, whilst acknowledging all who have suffered.

Speaking of which, according to Domain, 1 in 14 Australian home loans have been deferred as a result of fallout from COVID-19. This equates to over 400,000 loans. While things are starting to haphazardly return to some semblance of normality for many, there is still the question of what happens now with loans that have been put on hold. What many may not realise is that deferring payments is not a holiday per se. Interest will have still been accruing for example. There’s a fair bit of common sense info in the article. Well worth checking if you are affected.