Regional house prices increased at more than triple the rate of city slicker homes in 2020, according to CoreLogic’s Home Value Index.
The strong results come off the back of three consecutive month-on-month rises including a one per cent increase in December.
Overall, Australian home values finished the year three per cent higher but the biggest gains were made in regional housing where values shot-up almost 7 per cent.
The 6.9 per cent rate of capital gain in regional areas easily outstripped the combined capitals total where home values jumped 2 per cent in 2020.
House prices increased in every capital city except Melbourne in 2020, according to CoreLogic’s Home Value Index. Picture: NCA NewsWire / Andrew Henshaw
HOME BURGLARY DOWN DURING PANDEMIC
CoreLogic’s research director Tim Lawless said 2020 was characterised by a mild COVID-19 dip in values, which included a 2.1 per cent drop in dwellings between April and September, because of unprecedented volatility due to the pandemic.
CoreLogic head of research Tim Lawless said consumer confidence in housing increased in the second half of the year when COVID-related restrictions were eased. Picture: Supplied
He said the residential property sales plummeted by 40 per cent through March and April and yet rounded out with an almost eight per cent more sales year-on-year.
“Record low-interest rates played a key role in supporting housing market activity, along with a spectacular rise in consumer confidence as COVID-related restrictions were lifted and forecasts for economic conditions turned out to be overly pessimistic,” Mr Lawless said.
“Regional housing markets had generally underperformed relative to the capital city regions over the past decade, but 2020 saw regional housing values surge as demand outweighed supply.”
CoreLogic Home Values Index December 2020.
Excluding Melbourne, which was in a heavy lockdown for months following a second wave of coronavirus, Mr Lawless said every capital city recorded a higher rate of capital gain for houses relative to units in 2020 with investment stock flattened by the pandemic.
“Demand from investors has been weighed down by weak rental conditions across the unit sector along with high supply levels in some precincts,” he said.
“A transition of demand towards lower density housing options has helped to buoy house values.”
Melbourne home values are still -4.1 per cent below their March 2020 peak and Sydney dwelling values need to recover a further 3.9 per cent before topping the July 2017 peak.
Perth and Darwin values remain -19.9 per cent and -25.7 per cent, respectively, below their 2014 peaks.
