How has the pandemic changed housing markets?


The housing market has been on a rollercoaster ride since the World Health Organisation declared a global pandemic three years ago. Are market indicators shifting back to a pre-pandemic normal?

CoreLogic head of research Eliza Owen said major housing market metrics evolved over the years — while some are returning to normal, others are manifesting lasting changes brought about by the pandemic.

“Unprecedented expansionary fiscal and monetary policy, and subsequent tightening; heavy border closures, and reopening; and the normalisation of remote work amid lockdowns were pandemic biproducts that influenced housing markets,” she said.

“Housing market performance in the past three years shows extraordinary, record-breaking figures.”

Here are five significant changes the housing markets have seen over the past three years:

1. National housing values break several records.

The pandemic initially caused a decline in its onset — the lockdowns and the sharp decline in economic activity slowed down residential sales and listing volumes, which caused a 1.9% decline in prices between April and September 2020.

This, however, was followed by the sharpest upswing on record that was driven by the three-pronged monetary policy expansion that saw the cash rate to 0.1% and the stimulus payments of around $120bn.

The turnaround in economic activity from a sharp decline led to a more confident group of homebuyers, resulting to a surge in sales volume that hit a peak of 619,915 over the calendar year.

Then as the RBA started to increase the cash rate again, kickstarting the fastest consecutive uplift on record in May 2022, national home values started spiralling down.

The median dwelling price across the country has declined 9.1% to the end of February, which marks the largest downswing on record. Meanwhile, annual sales volumes were down 21.5%

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