House values still on the up, but not in Melbourne and Hobart: CoreLogic April update

COVID-19 pressures on the real estate industry has seen the nationally dwelling value growth slow over April, according to data firm CoreLogic's Hedonic Home Value Index.

Nationally, the monthly pace of growth more than halved, dropping from 0.7 per cent in March to 0.3 per cent in April, the smallest month to month movement since June last year when values started rebounding.

Despite many forecasters predicting widespread declines, dwelling values only dropped in Melbourne and Hobart, down -0.3 per cent and -0.1 per cent respectively.

Sydney kept a firm hold of the strongest real estate market, with dwelling values up 0.4 per cent to be 14.3 per cent up annually. Adelaide's 0.4 per cent growth in April saw their annual value growth rise to six per cent.

The surprise figure was in the Northern Territory where the dwindling Darwin market, with values down -2.7 per cent annually, jumped 1.7 per cent over the month.

CoreLogic head of research Tim Lawless said that although housing values were generally slightly positive over the month, the trend has clearly weakened since mid-to-late March, when social distancing policies were implemented and consumer sentiment started to plummet.”

Sydney's April gains were driven largely by the unit market, up 0.6 per cent, compared to houses up the 0.3 per cent.

Melbourne too saw a stronger performance from their unit market, up 0.1 per cent, while their housing values was down -0.4 per cent.

Lawless says Australia’s largest cities have a higher level of downside risk.

“Sydney and Melbourne arguably show a higher risk profile relative to other markets due to their large exposure to overseas migration as a source of housing demand, along with greater exposure to the downturn in foreign students, stretched housing affordability and already low rental yields that are likely to reduce further on the back of rising vacancy rates and lower rents," Lawless says.