Whilst the unfolding events surrounding the COVID-19 pandemic continue to escalate in Victoria, along with pockets of outbreak in New South Wales; Queensland is still faring very well in comparison, and our state government continues to monitor the situation closely.
The million-dollar question is ‘what impact is this having on the property market’? Well, there has been a noticeable slowdown in Victoria in particular, as well as a drop in prices. However, CoreLogic reports indicate an interesting phenomenon in the regional housing market, that may even see increased demand, as a result of COVID-19.
This is thought to be driven by the way the crisis has forcibly increased remote working for a substantial volume of certain sectors of the workforce, particularly the white-collar sector. As employers and employees adapt to remote working conditions, physical proximity to a workplace becomes less important as a criterion in a property purchase.
In the June 2020 quarter, about three months into the economic slowdown, regional centres have seen higher capital growth than city regions. See graph below demonstrating rolling quarterly growth of Brisbane alongside the Gold and Sunshine Coast.
Regional Australia is considered appealing for relatively low levels of density, less congestion, and typically lower price points for property. The median dwelling value for combined regional areas of Australia was $394,570 at June 2020, 38.5% lower than the combined capital city median of $641,671.
It is important to note that the broad-based impact to housing demand from the pandemic could see prices fall in regional centres over the second half of 2020. However, price falls are unlikely to be as sharp as what will be observed in capital city markets, where more expensive, capital city markets have historically shown more volatility than regional Australia.