Price Decline

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The overwhelming weight of expert commentary has rubbished Macquarie Bank’s forecast of major price decline in the next 12 months. 
Some media has presented Macquarie’s simplistic analysis, based on Australian as a single property market with a very specific price prediction, as the gospel according to irrefutable economists. But most coverage has been a counter-attack from credible commentators presenting more considered and realistic views of next year’s markets.
Aussie Home Loans chief John Symond said "there's buckley's chance of a price correction." As Property Observer reported on 22 October, Symond told a Sydney investment conference that Sydney's market was nearing its peak, <a href="/news/47301-sydney-s-booming-residential-property-market-was-nearing-its-peak-john-symond" target="_blank">with “steam coming out of the market and sanity coming in”</a>, and predicted a more flat market – but no across-the-board decreases.
And he observed, quite correctly, that there would be differences from one area to the next. "Hot areas will still see a 7-9% gain, in other areas you might see 3-4% and in some other areas a 5% drop," he said. "You have to do your homework." 
Yes, indeed. That is a far more reasoned assessment of the near future than Macquarie’s prediction of a blanket 7.5% decline, apparently everywhere.
Louis Christopher of SQM Research has predicted house price growth in 2016 but at a slower pace than recent years. As an experienced analyst, he knows better than to make a generalised forecast that covers the whole nation as a single market. He has different forecasts for each city and includes three different forecast scenarios in each case, dependent on key events including economic growth, interest rates and the value of the Australian dollar.
In the latest edition of Housing Boom and Bust Report from SQM Research, he predicted Sydney prices will rise between 4% and 9% next year. Melbourne is forecast to overtake Sydney and be the best-performing capital city in 2016 with a rise of between 8% and 13%. 
Christopher said the market overall is unlikely to see price decline for a number of reasons, including the Australian dollar, which is tipped to stay at current low levels or fall further, providing a buffer to the economy and the housing market. 
Raine &amp; Horne executive chairman Angus Raine believes the Macquarie prediction is difficult to substantiate given the current performance of major property markets. He said the level of demand for property and the depth to the market do not indicate a major correction.
Veronica Morgan, the principal of Good Deeds Property Buyers based in Sydney’s inner west, quite rightly criticised the bank for broadcasting the prediction without considering markets on a micro scale.
“It really annoys me when bank PR people get hold of some economic data and suddenly an impending drop in the property market is front-page news,” she said. “Why can I say that this latest prediction will not come true? Because there is really no such thing as an Australian property market. Look at any national property data and you will see that no two capital cities perform in the same way. 
“And then there are regional markets that all have their own cycles to consider. So how can anybody make a claim that the entire country is over-priced or ready for a fall? Even within Sydney there are dozens, probably hundreds, of micro markets."
Business commentator Peter Switzer said the bank forecast "bordered on being stupid", while Andrew Wilson, the senior economist at Domain's Australian Property Monitors, said it was “unbelievably unlikely”.
Wilson noted that, in the past decade, there had not been any national annual drops of more than 5%. “Even in periods where we had prices falling, such as during 2008 when it was the global financial crisis, the national house price fell by just under 4%,” Wilson said. 
Stockland chief Mark Steinert expects house prices to continue to rise next year. His forecast is 3% to 5%.
"There has been quite a lot of talk going on for quite a long time now about the imminent downturn in housing, but no one has mentioned that it hasn't actually eventuated," Steinert told a Property Council lunch in Melbourne. 
"The reality is the economy in Australia is growing at a moderate level of around 2.5%. We have a low Australian dollar, continued population growth (albeit at a slower rate) and metro housing markets that are generally under-supplied. These are not the pre-conditions for some sort of general correction in housing."
There have numerous other commentators on the issue and the general theme is that there will be price growth in 2016 - but, in the case of Sydney especially, the rate of growth will be less.
An alternative view has come from accident-prone Shane Oliver, AMP Capital’s chief economist, who is predicting price decline but not until 2017.
Oliver has probably the worst track record of any economist in predicting real estate events. I could fill several pages with examples, but basically he believes housing is “over-valued” and has been predicting a significant correction for most of the past 10 years.
He clearly is one of those, not unlike another failed forecaster Steve Keen, who believes that if you keep making the same prediction year after year, you’ll eventually get it right.
So Shameless Shane was out there in the media again recently expounding his bubble theories, with claims of over-valuation of housing and predictions that property prices would fall “between 5% and 10%” - which might happen “around 2017”.
 
Terry Ryder is the founder of <a href="https://www.hotspotting.com.au/" target="_blank">hotspotting.com.au</a>. You can <a href="https://mailto:ryder@hotspotting.com.au" target="_blank">email him</a> or follow him on <a href="https://twitter.com/hotspotting" target="_blank">Twitter.</a>
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Experts rubbish Macquarie Bank's price decline forecast: Terry Ryder

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Forecaster BIS Shrapnel this week used apartment oversupply as part of the justification for predicting (minor) price decline in some of our major cities over the next three years.
While I certainly share their concerns about over-building of high-rise apartments, I don’t agree that this means prices generally will fall in those cities.
Does a unit over-supply in inner-city Adelaide or Brisbane prevent house prices from growing in housing markets in the middle-ring and outer suburbs?
On the Gold Coast, past oversupply has resulted in key locations like Surfers Paradise having pricing levels lower than 10 years ago. But it hasn’t prevented inland housing suburbs from delivering price growth averaging 4-5 percent per year over the past decade.
So I expect price growth in housing markets in Brisbane, Adelaide, Canberra and Hobart – as well as the Gold Coast – regardless of the over-supply issue in the high-rise areas of those cities. I’m not expecting much from Sydney or Melbourne in the next few years, because those markets have passed their peaks and sales levels have fallen away dramatically, leading to price stagnation or minor decline.
The unit oversupply is a separate issue – and a serious one. It’s significant that lenders are including high-rise areas on blacklists, that developers are deferring planned projects and that vacancy rates are rising in key areas.
This week I updated vacancy rates for Brisbane inner-city suburbs for a seminar presentation. There has been a market blow-out in vacancies in all six suburbs I reference in that presentation. Most now have vacancies in the 5-6 percent range, according to SQM Research figures. 
In the space of three months, the vacancy rate for the Brisbane CBD has increased from 4.4 percent to 5 percent, while Woolloongabba is up from 4.8 to 5.5 percent and New Farm has increased from 5.3 to 6.1 percent.
These statistics will worsen as projects now under construction are completed and their apartments join the rental pool – because very few of the sales are being made to owner-occupiers.
Apartment markets with current or looming surpluses of stock make up half of the 10 markets highlighted in my No Go Zones report (the only half being regional areas impacted by the resources sector).
This really is one of the core issues facing the property industry. While the developer lobby keeps running the party line about dwelling shortages – despite two years of record building approvals pumped up by apartment projects – the big issue is the opposite problem of surplus.
It’s inevitable that, in some markets, vacancies will rise, rents will fall and values will be impacted.
As BIS Shrapnel senior director Angie Zigomanis says: “Nearly all capital cities are building apartments at record rates on the back of the recent strength in investor demand. As these projects are progressively completed, it is likely that there will not be enough tenants in a number of cities to support rents and consequently values upon completion.”
I’m amazed at how many people are still buying apartments in Surfers Paradise, inner-city Melbourne and inner-city Brisbane, and by the number of new projects seeking approval in oversupplied markets like Perth, Brisbane and Melbourne.
Across the key high-rise suburbs of the Gold Coast, Melbourne and Brisbane, 8,242 people have bought apartments in the past 12 months, including 1,588 in Surfers Paradise and 1,501 in the Melbourne CBD. 
Do these people not read? Don’t they have access to the Internet? The warnings from analysts, commentators, lenders and the Reserve Bank over the past 12-18 months add up to a deafening roar.
If you’re ignoring all that and still buying high-rise units off-the-plan in these markets - or if you’re oblivious to it because you haven’t done even the most basic research - you deserve to lose money.
 
Terry Ryder is the founder of hotspotting.com.au
<a href="mailto:hotspotting@gmail.com">hotspotting@gmail.com</a>
twitter.com/hotspotting
 
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Apartment over-building doesn't mean prices will fall: Terry Ryder

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EXPERT OBSERVER
Headline: House prices fell in May. Alternative headline: House prices rose in May. 
Which is right? Actually, both. Or, more correctly, it depends on whose figures you believe.
CoreLogic records a 0.4% reduction in house prices (overall, the average across the nation) during May, but Louis Christopher’s SQM Research reports a 1.1% rise in house prices over the same period.
And when the latest figures from Domain and the ABS become available, they’ll have different numbers as well.
We could spend hours discussing why different sources produce different (and sometimes conflicting) results on what’s happening with property prices. But suffice to say that they all have their own methodologies and parameters – and what they’re attempting, to distil tens of thousands of sales in myriad locations into a single growth figure, is a tad challenging.
But, ultimately, it’s doesn’t matter whether CoreLogic is right or SQM is right. Essentially, they’re saying the same thing: property prices are remarkably stubborn in the face of major negative forces. As they so often are.
House prices continue to defy the doomsday forecasters, many of them economists who refuse to let go of their flawed theories about how property prices SHOULD behave – and others among them opportunists who see potential to generate free publicity.
Here are some headlines:
<ul class="ul1">
<li class="li1">“House prices to drop 20%: AMP Capital” – The Australian, 19 March.</li>
<li class="li1">“House prices could drop by up to 20%, says UBS” – Financial Review, 18 March</li>
<li class="li1">“Prices to plunge 30% as clearance rates fall off a cliff” – The Age, 8 April</li>
<li class="li1">“House prices will collapse, says UBS” – Financial Review, 2 April</li>
<li class="li1">“Can’t rule out 30% fall in house prices, says SQM” – Financial Review, 7 April</li>
<li class="li1">“House prices could dive 30%” – The Age, 27 April</li>
</ul>
For those who declare “but it’s early days”, it isn’t.
This pandemic shemozzle, in terms of its impact on Australian life, declared itself on 20 February when the share market had its first meltdown. We’ve already been through the worst of the health impacts and the toughest of the restrictions and now we’re emerging steadily from lockdown towards increasing levels of normality.
When the price data for March (showing growth in most markets) was published, many in mainstream media said: “Yeah, but wait to we get the April figures, then we’ll see the true impact of Covid-19.”
When the April figures came out (again showing minor growth in most markets), we got the same reaction: “Yeah, but May will see prices nosediving.”
Well, that didn’t happen either. The CoreLogic data showed that in May there was growth or no change in house prices in nine of the 15 market jurisdictions (eight capital cities and seven state regional markets), with an overall result of -0.4%, while SQM reported a national rise of 1.1% and a capital city rise of 0.5%, with increases in Sydney, Melbourne, Perth, Adelaide and Canberra.
So, now the standard line from failed forecasters seeking to justify their negative stance on property markets is this: “Yeah, prices are stable for now but in September when the stimulus runs out everything will fall off a cliff.”
This comes direct from the kindergarten of real estate forecasting. It assumes that nothing will change over the next 3-4 months and that governments and lenders will recklessly turn off the tap without any regard to consequences. 
It also assumes that it’s all about JobKeeper and mortgage holidays, and overlooks the importance of infrastructure spending, loans and grants to businesses, support measures for renters, ongoing government stimulus measures like the $25,000 grant to home builders and renovators, and a whole lot more.
Australia has done well in this crisis and continues to do so. And the future belongs to those who see opportunity rather than calamity.
Terry Ryder is the founder of hotspotting.com.au
<a href="https://mailto:ryder@hotspotting.com.au">ryder@hotspotting.com.au</a>
twitter.com/hotspotting
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How true are real estate price fall headlines? Hotspotting's Terry Ryder

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Residential property prices fell -1.8 per cent in the June quarter 2020, according to the latest figures released today by the ABS.
Melbourne (-2.3 per cent) and Sydney (-2.2 per cent), were the nation's worst performers over the quarter, but all capitals apart from Canberra saw declines.
Over the 12 months however to the June quarter 2020, property prices across the country jumped 6.2 per cent.
Only Perth and Darwin didn't record a rise.
According to the ABS Melbourne led the way with 8.8 per cent gains, followed by Sydney's 8.1 per cent rise.
To enlarge, <a href="https://www.propertyobserver.com.au/images/2020/9/17/Price%20indexes.png" target="_blank">click here</a>.
<img src="https://www.urban.com.au/images/2020/9/17/Price%20indexes.png" alt="">
The ABS advised that the total value of Australia’s 10.5 million residential dwellings fell by $98.2 billion to $7,138.2 billion in the June quarter 2020. 
The mean price of residential dwellings in Australia in the June quarter 2020 was $678,500. 
Sydney's decline over the June quarter was driven by houses, which saw declines of -2.6 per cent, back from its March quarter gains of 2.6 per cent.
The ABS say the falls in Sydney's housing market were most evident in the middle to upper market segments, which they calculate at $940,000 and above.
Houses prices are 9.2 per cent higher over the last 12 months.
Units fell back -1.4 per cent, after a 0.8 per cent gain in the March quarter. Over the 12 months unit values are up 6.1 per cent.
The larger declines were in the middle to upper market bracket, $670,000 and above.
It was a similar story in Melbourne with houses the hardest hit in the June quarter. Prices were down -2.8 per cent following a 2.3 per cent March quarter gain.
The ABS say price falls were most evident in the middle to upper segment of the market, which they calculate is $8100,000 and above.
Melbourne's house values are up 8.9 per cent over the last 12 months, just shy of Sydney.
Unit prices over the June quarter dropped one per cent, from a 1.5 per cent gain in the March quarter.
Price falls were most evident in the upper segment of the market, which the ABS say is $670,000 and above.
 
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Melbourne and Sydney lead 1.8 per cent June quarter decline: ABS

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Melbourne has joined Sydney as a declining housing market, according to the latest national property clock from valuation firm Herron Todd White.
Last month HTW had Melbourne houses starting to decline, with <a href="https://www.urban.com.au/expert-insights/investing/116227-sydney-residential-market-hit-harder-than-melbourne-htw-residential-clock#:~:text=17%20August%202020-,Sydney%20residential%20market%20hit%20harder%20than%20Melbourne%3A%20HTW%20Residential%20Clock,valuation%20firm%20Herron%20Todd%20White.&amp;text=There%20has%20been%20no%20movement,position%20this%20month%2C%20HTW%20found." target="_blank">Sydney already deemed a declining market</a>.
There was worse news to come from Sydney's Central Coast, whose housing market last month was at the bottom of the market.
Now HTW believe there's still further to go for the region, now joining Sydney, Melbourne, Brisbane and Ipswich as a declining market.
Good news for Sydney's other popular weekender hotspot, the Southern Highlands, whose housing market is starting to rise.
To enlarge, <a href="https://www.propertyobserver.com.au/images/2020/9/9/HTW%20house%20clock%20September.jpg" target="_blank">click here</a>.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2020/9/9/HTW%20house%20clock%20September.jpg" alt="">
Hobart continued to look strong, with houses at the peak of the market. Launceston and the Burnie/Devenport area too joined in the good times.
The housing markets in Darwin, Broome and Bundaberg are at the bottom, joining Alice Springs and the Southern Tablelands.
With COVID-19 impacting real estate markets nationally, and even globally, valuers at Herron Todd White are asking “Will Spring spring in 2020?”
"Spring has always been considered an excellent time to sell, particularly if you have a detached dwelling with a garden; the blooming plants and warmer climate make an attractive prospect for buyers", Herron Todd White's monthly report advises.
"With the effects of COVID-19 still playing out, we feel that properties that offer landscaped gardens and study rooms will further attract keen buyers as people continue to spend more time at home, either working or relaxing."
 
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Melbourne joins Sydney as declining housing market: HTW National Property Clock

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National dwelling values continued to trend lower over August, the fourth consecutive month of declines, according to CoreLogic's home value index.
Declines are softening however, with values recording a -0.4 per cent decline in August, better than the <a href="https://www.urban.com.au/news/115970-melbourne-real-estate-values-continue-decline-through-july-corelogic" target="_blank">-0.6 per cent decline over July</a> and -0.7 per cent over June.
Melbourne's -1.2 per cent dwelling value decline drastically skewed the overall national decline.
Sydney and Brisbane were the only other two capitals to record declines, with values contracting -0.5 per cent and -0.1 per cent respectively.
Darwin was the best performer, with dwelling values up one per cent, following by Canberra's 0.5 per cent gain.
Hobart's values rose 0.1 per cent, while Adelaide and Perth remained unchanged.
To enlarge, <a href="https://www.propertyobserver.com.au/images/2020/9/1/CL%20August%20dwelling%20index.jpg" target="_blank">click here</a>.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2020/9/1/CL%20August%20dwelling%20index.jpg" alt="">
CoreLogic's head of research Tim Lawless highlighted the Melbourne market dragging the headline results.
“Following a similar decline in July, Melbourne home values fell by 1.2% in August, the largest fall recorded amongst the capital cities, demonstrating the impact of a worse viral outbreak relative to other cities, along with a larger demand side impact from stalled overseas migration", Lawless said.
"Through the COVID period to date, Melbourne home values have fallen by 4.6%.”
<h1>Houses and Units</h1>
Houses are still driving the decline across Melbourne and Sydney.
Melbourne's houses scaled back another -1.4 per cent, following on from another -1.4 per cent over July to be -4 per cent down for the quarter.
Sydney's house value declines softened over August, down -0.5 per cent, after a -1 per cent decline over July. They are now -2.4 per cent down on the quarter.
Sydney units were down -0.3 per cent over August, also better than the -0.7 per cent declines in July.
Melbourne units suffered as COVID-19 continues to lockdown the city. They contracted -0.8 per cent, from 0.7 per cent July falls.
To enlarge, <a href="https://www.propertyobserver.com.au/images/2020/9/1/CL%20dwelling%20index%20full.jpg" target="_blank">click here</a>.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2020/9/1/CL%20dwelling%20index%20full.jpg" alt="">
Brisbane's houses recovered to see no value falls over August, with units (-0.3 per cent) dragging their dwelling value decline in to the negative over the last month.
The biggest contrast of house and unit performance was in Hobart. Houses were up 0.3 per cent, but units down -0.7 per cent over August.
Darwin's bumper one per cent gains were primarily driven by houses, up 1.1 per cent, and held by units, up 0.7 per cent.
Darwin now have the only housing and unit market in the country with gains over the last quarter.
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“Looking forward we are likely to see a diverse outcome for housing markets around Australia, depending on how well the virus is contained and the regions exposure to other factors such as its reliance on overseas migration as a source of housing demand," Lawless added. 
 
 
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Sydney value decline slows as Melbourne worsens: CoreLogic's September Index

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July saw a third consecutive month of declines for property values across the country, with the national index dropping a further 0.6 per cent over the month, according to property data firm CoreLogic.
The decline however was slightly less than the -0.7 per cent <a href="https://www.urban.com.au/news/114943-melbourne-leads-east-coast-residential-june-price-declines#:~:text=30%20June%202020-,Melbourne%20leads%20east%20coast%20residential%20June%20price%20declines%3A%20CoreLogic,consecutive%20month%20of%20falls%20nationally.&amp;text=Sydney%20posted%20%2D0.8%20per%20cent,per%20cent%20declines%20over%20May." target="_blank">declines posted over June</a>.
Canberra (+0.6 per cent) and Adelaide (+0.1 per cent), were the only capitals to buck the trend.
Sydney and Melbourne led the way in declines, with the Victorian capital, now in lockdown again, seeing a -1.2 per cent decline, and the harbour capital with values scaling back -0.9 per cent.
Melbourne's quicker decline has seen its annual returns drop below 10 per cent for the first time since March.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2020/8/3/CL%20dwelling%20index%20August.jpg" alt=""> 
CoreLogic's head of research Tim Lawless says housing markets have remained relatively resilient through the COVID period so far.
“The impact from COVID-19 on housing values has been orderly to-date, with CoreLogic’s national index falling only 1.6% since the recent high in April and housing turnover has recovered quickly after it’s sharp fall in late March and April.”
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“Record low interest rates, government support and loan repayment holidays for distressed borrowers have helped to insulate the housing market from a more significant downturn. 
"Advertised supply levels have remained tight, with the total number of properties for sale falling a further 4.3% in the 4 weeks to July 27th, sitting 15.2% below where they were this time last year. 
"Additionally, increased demand driven by housing specific incentives from both federal and state governments, especially for first home buyers, have become more substantial.”
<h1>Houses and Units</h1>
It was another mixed bag for the housing and unit market across July, with the unit market holding up slightly better than the housing market across most capitals.
Sydney, Melbourne and Hobart all saw units outperform houses, while Brisbane, Adelaide, Perth, Darwin and Canberra all saw a stronger month for housing.
It was again the housing market that dragged Melbourne and Sydney to the top of the worst performers.
Melbourne's housing market saw a further -1.4 per cent declines, following on from -1.3 per cent declines in June, while Sydney's one per cent contraction across July was slightly worse than its -0.9 per cent last month.
Both of the country's major capital city markets saw their units scale back -0.7 per cent.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2020/8/3/CL%20value%20index%20August.jpg" alt="">
Tim Lawless says the medium term outlook remains skewed to the downside across the country with the government's fiscal support set to taper from October. 
“Urgent sales are likely to become more common as we approach these milestones, which will test the market’s resilience", Lawless suggests.
"Similarly, the recent concerns of a second wave of the virus and the potential for renewed border closures and stricter social distancing polices are likely to further push consumer sentiment down.
"This is likely to weigh on both home buying and selling activity more broadly.”
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Melbourne real estate values continue decline through July: CoreLogic

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Australia's eastern states continue to drive the residential dwelling value decline across the country, with a second consecutive month of falls nationally.
CoreLogic's Home Value Index recorded a -0.7 per cent decline in values over June, following on from a -0.4 per cent decline over May.
And again it's been Sydney and Melbourne the two main drivers, the Victorian capital the joint worst performer across the country, down -1.1 per cent and matching Perth's decline.
Sydney posted -0.8 per cent dwelling declines, having seen -0.4 per cent declines over May.
To enlarge, <a href="https://www.propertyobserver.com.au/images/2020/7/1/CL%20index%20June.jpg" target="_blank">click here</a>.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2020/7/1/CL%20index%20June.jpg" alt="">
There were smaller declines in Brisbane and Adelaide, while Hobart, Canberra and Darwin all bucked the downward trend.
Despite June's value decline, market activity estimates were encouraging, showing a 29.5 per cent surge in home sales. Over May sales activity had been up 21.5 per cent.
CoreLogic head of research Tim Lawless said the downwards pressure on home values has remained mild to-date, with capital city dwelling values falling a cumulative 1.3% over the past two months. 
"A variety of factors have helped to protect home values from more significant declines, including persistently low advertised stock levels and significant government stimulus", Lawless suggested.
"Additionally, low interest rates and forbearance policies from lenders have helped to keep urgent sales off the market, providing further insulation to housing values.”
<h2>Houses and Units</h2>
The housing market across the country performed slightly worse than units over the month, with -0.7 per cent declines compared to units -0.6 per cent.
And it was the housing market that dragged down Sydney and Melbourne.
Sydney's house values dropped -0.9 per cent, compared to the -0.6 per cent decline in unit values.
There was a bigger difference in Melbourne where they saw house values scale back -1.3 per cent compared to units -0.7 per cent.
To enlarge, <a href="https://www.propertyobserver.com.au/images/2020/7/1/CL%20full%20index%20June.jpg" target="_blank">click here</a>.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2020/7/1/CL%20full%20index%20June.jpg" alt="">
The unit markets however in Brisbane, Adelaide and Perth all underperformed compared to housing.
Darwin and Canberra were the only capital's to see gains in both the housing and unit markets.
<h2>Where are prices falling?</h2>
In that nation's two biggest real estate markets, values are down the most in the upper quartile.
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“Higher value markets tend to be more reactive to changes in the environment, having led both the upswing and the downturn over previous cycles", Lawless said.
"The past three months has seen this trend playing out, with upper quartile values down 1.7% across the combined capital city index over the past three months, while lower quartile values have fallen by only 0.3%."
Lawless says the capital city trend is driven mostly by Sydney and Melbourne, while the smaller cities have shown a mixed result across the valuation cohorts.
"In Sydney the upper quartile is down 1.3% over the past three months, while lower quartile values are up 0.2%.
"Similarly, over the same period in Melbourne, upper quartile values are down 3.7% while lower quartile values have declined a more modest 0.5%.
"Importantly, the upper quartile also recorded the most significant run-up in values throughout the second half of last year."
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Melbourne leads east coast residential June price declines: CoreLogic

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Nearly six in 10 experts in Finder.com.au's RBA Cash Rate Survey say now is not a good time to buy property.
Experts and economists have predicted nationwide price falls, with Sydney and Hobart being the hardest hit, both declining over 10 per cent.
Darwin and Melbourne will both see over nine per cent declines, while over eight per cent drops will be felt in Brisbane, Perth and Adelaide.
Canberra is predicted to weather the storm the most, with 6.4 per cent declines forecast.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2020/5/6/Finder%20price%20dip%20experts.jpg" alt="">
Graham Cooke, insights manager at Finder, said with increasing unemployment and growing economic uncertainty house prices will slide over the rest of the year. 
“Both househunter and seller demand has weakened in the last month as Australians hunker down to help stop the spread of coronavirus," Cooke said.
“It’s not just experts, we’ve also seen consumer sentiment about whether it is a ‘good time to buy’ drop from a peak of 60% in July 2019 to just 42% in April."
Unemployment is a key reasons for the envisaged price falls.
John Rolfe, head of Elders Home Loans expects unemployment to go as high as 18%. Noel Whittaker, executive in residence and adjunct professor at QUT Business School said the full impact of COVID-19 is yet to be understood. “This recession will be far worse than the government imagines...they can't close down so many businesses and not expect a severe hangover.  “As for real estate, it's never a bad time to buy a bargain,” Whittaker said. 
Susan Mitchell at Mortgage Choice said social distancing measures had "knocked the wind out of the sails of the property market."
"Time will tell if this will translate to declining dwelling values," she said.
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