Where property prices have fallen the most since COVID-19

Editor-at-Large · 6 July 2020
CoreLogic has identified the areas where property prices have been impacted the most by COVID-19. Does yours make the list?

COVID-19 and the recession have both resulted in increased speculation about what will happen to Australian property prices. Some predict prices will stay relatively stable, others are saying we can expect a big crash while some sit somewhere in the middle. Who will be right remains to be seen but at this stage the declines in property values have been pretty mild.

According to the latest CoreLogic Home Value Index housing values dropped by 0.7% in June, following a 0.4% decline in May. “A variety of factors have helped to protect home values from more significant declines, including persistently low advertised stock levels and significant government stimulus. Additionally, low interest rates and forbearance policies from lenders have helped to keep urgent sales off the market, providing further insulation to housing values,” said CoreLogic’s Head of Research, Tim Lawless.

Even though the drops have been mild the longer term outlook remains highly uncertain said Mr Lawless. “While it is encouraging to see lenders have recently hinted at an extension in their repayment leniency policies, the government stimulus will eventually taper and banks will require borrowers to repay their loans. The longer term outlook for the housing market is largely dependent on how well the economy is tracking when these support measures are removed,” he explained.

Which markets have been most impacted by COVID-19?

As Eliza Owen, Head of Australian Research at CoreLogic, pointed out, the Australian housing market is not one market, but a collection of many. “Over the past few months, dwelling market performance has varied by region, in both a cyclical and structural way,” she explained. “As per historic cycles, the most expensive parts of Sydney and Melbourne seem to be leading the current downswing.”

CoreLogic has identified the areas that have suffered the biggest drops since the onset of COVID-19. It ranked a number of Statistical Areas Level 4 (SA4) regions across the capital cities by the capital growth performance in dwelling markets from March to May. You can see the results in the table below.


Capital City Region Statistical Area 4 Region Change in dwelling

market values*

Greater Perth Mandurah -2.2%
Greater Melbourne Melbourne – Inner South -2.2%
Greater Melbourne Melbourne – Inner -1.8%
Greater Melbourne Melbourne – Inner East -1.8%
Greater Perth Perth – South East -1.2%
Greater Melbourne Melbourne – Outer East -1.2%
Greater Brisbane Ipswich -0.8%
Greater Sydney Sydney – North Sydney and Hornsby -0.7%
Greater Sydney Sydney – Inner West -0.7%
Greater Sydney Sydney – Northern Beaches -0.7%
Greater Melbourne Melbourne – North East -0.6%
Greater Brisbane Brisbane Inner City -0.5%
Greater Melbourne Mornington Peninsula -0.5%
Greater Brisbane Logan – Beaudesert -0.5%
Greater Melbourne Melbourne – South East -0.4%
Greater Sydney Sydney – Inner South West -0.4%
Greater Sydney Sydney – Baulkham Hills and Hawkesbury -0.3%
Greater Perth Perth – North West -0.3%
Greater Brisbane Moreton Bay – South -0.3%
Greater Sydney Sydney – Sutherland -0.2%
Greater Sydney Sydney – South West -0.1%
Source: CoreLogic. *Change from 31 March to 31 May.

As the table shows, Mandurah in Western Australia and Inner South Melbourne top the list, albeit with fairly modest drops of 2.2% over the two-month period.

The continued decline in Mandurah is a bit of a surprise according to Ms Owen. “Mandurah dwelling values were 38% below their 2006 peak at the end of May this year. The renewed downwards pressure comes just after the Perth dwelling market was starting to enjoy a long-awaited growth phase in the start of 2020,” she said.

“Payroll data analysis from the ABS suggests that payroll job losses across Mandurah has been 6.0% between mid-March and the end of May. This is not especially severe when it comes to job loss across Perth regions, nor would Mandurah have been particularly susceptible to a demand shock from a decline in overseas migration. However, the decline in dwelling values is off the back of a longer-term downward trend, suggesting demand conditions were already fragile across the region.”


Aerial view of Melbourne city CBD
Aerial view of Melbourne city CBD high-rise towers from Port Melbourne. Source: Taras Vyshnya (Shutterstock)

Ms Owen was less surprised to see Melbourne’s inner city and eastern suburbs and some high-end markets in Sydney, such as North Sydney, the Inner West and the Northern Beaches make the list.

“At a suburb level, the biggest price falls are more reflective of the historic cyclical trends, where the downturn is most prevalent in the high end of Sydney and Melbourne this far. At this stage, sound analysis of the change in suburb-level dwelling markets is limited to areas where there are relatively high sales observations,” she explained.

The worst-performing suburbs in Melbourne and Sydney

CoreLogic also revealed the suburbs in Melbourne and Sydney that have had the biggest drop in dwelling values between the end of March and the end of May. Topping the list is Malvern East where values are down 4.8%.

Suburb Change in dwelling

market values*

Malvern East, Melbourne -4.8%
Glen Iris, Melbourne -3.8%
Northcote, Melbourne -3.5%
Port Melbourne, Melbourne -3.2%
Brunswick East, Melbourne -3.1%
Mosman, Sydney -2.5%
Lane Cove North, Sydney -2.4%
Manly, Sydney -2.3%
Leichhardt, Sydney -1.7%
Wentworth Point, Sydney -1.4%
Source: CoreLogic. *Change from 31 March to 31 May.

“As the downturn progresses, we are likely to see continued declines in inner-city markets that had previously relied on international migration for new housing demand,” said Ms Owen.

“However, as the wider economic downturn drags on housing demand, mild price declines are likely to spread, resulting in a more broad-based downturn in the next 12 months.”

This article was reviewed by Editorial Campaigns Manager Maria Bekiaris before it was published as part of our fact-checking process.

Main image source: Alex_Po (Shutterstock)

Canstar’s Editor-at-Large, Effie Zahos, has more than two decades of experience helping Aussies make the most of their money. Prior to joining Canstar, Effie was the editor of Money Magazine, having helped establish it in 1999. She is an author and one of Australia’s leading personal finance commentators, appearing regularly on TV and radio.


This article was reviewed by Editorial Campaigns Manager Maria Bekiaris before it was published as part of our fact-checking process.


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