SYDNEY (Reuters) – Australian home prices edged higher in October to break a five-month losing streak amid record-low interest rates and limited stock, even as a coronavirus lockdown in Victoria state hamstrung the major Melbourne market.
Data from property consultant CoreLogic out on Monday showed national home prices rose 0.4% in October, the first increase since April when a country-wide lockdown hammered the market.
Prices were up 3.9% on October last year, with regional housing in demand as some seek to leave the cities. Values across the major capitals firmed 0.2% in October, while regional prices climbed 0.9%.
Sydney eked out a gain of just 0.1% and Melbourne dipped 0.2%, while cities that had been largely COVID-free for some time powered ahead. Prices rose 1.2% in Adelaide and Darwin, and 1.0% in Hobart and Canberra.
With Melbourne’s long lockdown now also easing, listings and auctions in the city were surging.
“Based on this recent trend in housing values and activity, it seems likely we will see Melbourne follow the other capital cities towards a recovery over the coming month,” said CoreLogic’s head of research Tim Lawless.
He noted that despite the jump in listings, the total stock of national housing up for sale was still near all-time lows.
“Persistently low total stock levels in the face of surging new listing numbers point to a strong rate of absorption, as buyer demand exceeds advertised supply levels,” said Lawless.
Australia’s housing stock was valued at A$7.2 trillion in September even after a nation-wide lockdown tipped the economy into its first recession in 30 years.
The Reserve Bank of Australia (RBA) has indirectly supported residential demand by lowering borrowing costs to record lows and is widely expected to cut its cash rate to just 0.1% at a policy meeting on Tuesday.
Reporting by Wayne Cole; Editing by Daniel Wallis