Australian property prices are predicted to soon hit new record highs, as property prices soared 1.1 per cent nationally in February.
Property research house CoreLogic stated in its February report this week: ‘At the current run rate of growth, the national index is likely to reach a new nominal high over the next two months.’
Quick price growth has been enough for five cities – Melbourne, Brisbane, Canberra, Hobart and Adelaide – to set new record highs. While Sydney has seen the fastest growth of all capital cities, it has yet to return to the dizzying heights it reached in July 2017.
Even Perth has managed to etch out the first gains it has seen since 2014, adding 0.3 per cent to prices over the last month. Darwin is still the lone straggler, as prices actually continue to fall in the Top End.
However, the coronavirus is expected to have a negative impact on the Australian property market, perhaps stalling the new property price record highs; as overseas property investors, particularly from China, become less likely to attend in person.
‘In several real estate markets, we already see negative impacts,’ Chinese real estate Juwai notes in a February market update issued to Business Insider Australia. ‘These include a reduction in the in-person presence of Chinese buyers at auctions, a similar decrease at inspections, and the stalling between contract signing and final settlement of some transactions involving Chinese buyers.’
However, while acknowledging the potential short-term impact, Juwai remains confident that strong Chinese interest will only be impacted short-term, noting ‘the Coronavirus apart, we expect to see further improvement in Chinese buyer demand in 2020’.
On the domestic front, the coronavirus could, in fact, bring forward an expected interest rate cut, reducing the cost of borrowing and further stimulating property markets, to see prices reach new record highs.
Last weekend, real estate remained as popular as ever with 83 per cent of Sydney and 77 per cent of Melbourne properties selling at auction.