• Property in Australia’s capital cities rose an average of 3% in 2020, while regional markets climbed 6.9% higher, according to CoreLogic.
• It was capped off by a strong December, with prices rising across the board, and Darwin leading the charge with a 2.3% jump.
• Looking into 2021 however, head of research Tim Lawless noted that “risks remain”, especially with the prospect of further lockdowns and border closures remaining.
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Despite a pandemic and a brief recession, Australian property has managed to buck the worst of 2020, with prices ending the year 3% higher than where they began.

According to the latest CoreLogic data on Monday, national values rose a clean 1% throughout December as demand for property continues to outstrip supply, more than making up for a mid-year rout.

“Despite the volatility, housing values showed remarkable resilience, falling by only 2.1% before rebounding with strength throughout the final quarter of 2020,” head of research Tim Lawless said.

“The number of residential property sales plummeted by 40% through March and April but finished the year with almost 8% more sales relative to a year ago as buyer numbers surged through the second half of the year.”

The nation’s capital cities finished up an average of 0.9% over the month, with none climbing faster than Darwin, ending December 2.3% higher.

Melbourne, Brisbane, Perth and Adelaide all rose around 1%, while Sydney, Hobart and Canberra brought in the rear.

However, it was regional markets that outshone, with prices rising twice as much as the state capitals over the year, lifting 6.9%, or 3.9% higher than Australia’s cities.

“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,” Lawless said.

While major bank economists had predicted large price falls at the outset of the pandemic, record stimulus measures appears to have secured the fortunes of markets and homeowners.

“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. Containing the spread of the virus has been critical to Australia’s economic and housing market resilience,” Lawless said.

While Lawless maintains the 2021 outlook seems positive, he noted the “risks remain clear and present”.

“As demonstrated by Melbourne’s second round of lockdowns, new restrictions associated with a COVID outbreak would set back the economic recovery and have a negative, although temporary impact on housing markets,” he said.

“Closed international borders are another wildcard. The longer borders remain closed the greater the impact is on housing demand, especially rental demand. Regions where overseas migration has historically comprised a larger portion of overall population growth, such as Melbourne and Sydney, will be impacted the most by prolonged border closures.”

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