Australian home prices dragged lower by Melbourne lockdown

[SYDNEY] Australian home prices slipped for a fourth straight month in August as a strict coronavirus lockdown in Victoria state weighed heavily on the major Melbourne market, even as some other cities enjoyed a much-needed upturn.

Data from property consultant CoreLogic out on Tuesday showed home prices across the nation fell 0.4 per cent in August from July, when they dropped 0.6 per cent. The pace of monthly declines has been slowing as much of the country is now restriction free.

Values were still up 5.8 per cent on August last year reflecting the strength of the market ahead of the pandemic.

Prices in the capital cities fell 0.5 per cent in August, but again were still 6.3 per cent higher on the year. Melbourne was the major loser with a drop of 1.2 per cent as the lockdown curtailed auctions and damaged buyer confidence.

Sydney saw values drop 0.5 per cent in August, compared to a 0.9 per cent fall the previous month. Indeed, prices rose in Canberra, Darwin and Hobart while Perth and Adelaide held steady.

"It's not surprising to see Melbourne as the weakest housing market considering the extent of the virus outbreak, and subsequent restrictions," said CoreLogic's head of research Tim Lawless.

Auction volumes in Melbourne also turned down sharply in August, reaching lows not seen since April.

Australia's housing stock had been valued at a huge A$7.2 trillion (S$7.23 trillion) in March before a nation-wide lockdown tipped the economy into its first recession in 30 years.

The Reserve Bank of Australia (RBA) has cut rates to just 0.25 per cent and is expected to reiterate its willingness to do more if needed at a policy meeting later on Tuesday.

The conservative government of Prime Minister Scott Morrison is also under intense pressure to come up with fresh stimulus as the outbreak in Melbourne clouds sentiment nationally.

REUTERS