Housing market trends - Our Insights. Your Story. May 2020 - Home Loan ...
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Housing market trends Our Insights. Your Story. May 2020
Residential Real Estate Underpins Australia’s Wealth
RESIDENTIAL REAL ESTATE
$7.2 Trillion
AUSTRALIAN SUPERANNUATION
$3.0 Trillion
AUSTRALIAN LISTED STOCKS
$2.0 Trillion
COMMERCIAL REAL ESTATE
$1.0 Trillion
Data as at May 2020
10.4 million $1.83 trillion 52.4% 421,977 $278.3 billion
Number of dwellings Outstanding mortgage debt Household wealth held in housing Total sales p.a. Gross value of sales p.a.
18 July
©©2020
2019 CoreLogic,
CoreLogic, Inc.
Inc.All
AllRights
RightsReserved.
Reserved. Source: CoreLogic, APRA, RBA, ABS, ASX 2
The impact on the housing market from coronavirus remains highly uncertain… Previous economic shocks have seen housing values relatively insulated, while volumes are more susceptible to volatility.
Housing values have generally been insulated from financial shocks
historically but have been more reactive to credit tightening events
Housing indices v All Ordinaries index across previous shocks (5yrs either side of event)
Black Monday stock Asian financial crisis Tech wreck / Sep 11 GFC Macroprudential, (Dec 14
market crash (Oct 87) 190 (Dec 97) 190 (Jan 08) / Mar 17)
190 160
140
140 140 140
90 110
90 90 90
Housing values Housing values Housing values
Housing values Housing values
All Ords All ords All ords All ords
All ords
40 40 40 40 60
Oct 82 Oct 87 Oct 92 Dec 92 Dec 97 Dec 02 Sep 96 Sep 01 Sep 06 Jan 03 Jan 08 Jan 13 Dec 09 Dec 14 Dec 19
Housing volume v All Ordinaries index across previous shocks (5yrs either side of event)
Black Monday stock Asian financial crisis Tech wreck / Sep 11 GFC Macroprudential
market crash (Oct 87) (Dec 97) 4,000
(Sep 01) (Jan 08) (Dec 14 / Mar 17)
250000 2,500 450,000 6,000 200,000 8,000 400,000 8,000
400,000
3,000 180,000 6,000 6,000
150000 1,500 350,000 4,000 300,000
300,000
2,000 160,000 4,000 4,000
Volume of sales Volume of sales Volume of sales Volume of sales Volume of sales
All ords All ords All ords All ords All ords
50000 500 200,000 1,000 250,000 2,000 140,000 2,000 200,000 2,000
Oct 82 Oct 87 Oct 92 Oct 82 Oct 87 Oct 92 Sep 96 Sep 01 Sep 06 Jan 03 Jan 08 Jan 13 Dec 09 Dec 14 Dec 19
Housing values and volumes are based on combined capitals region
18 July
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2019 CoreLogic,
CoreLogic, Inc.
Inc.All
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Reserved. Source: CoreLogic 4
Australian home values have been in an upswing since mid-2019, however the short-term outlook is for extreme uncertainty and downside risk followed by a rebound as economic conditions recover.
The quarterly trend in value growth shows the market moved
through ‘peak’ growth late last year
Quarterly change in dwelling values
8% 8%
6% 6%
4% 4%
2% 2%
0% 0%
-2% -2%
-4% -4%
-6% -6%
Apr 15 Apr 16 Apr 17 Apr 18 Apr 19 Apr 20 Apr 15 Apr 16 Apr 17 Apr 18 Apr 19 Apr 20
Sydney Melbourne Brisbane Adelaide Perth Hobart Darwin Canberra
18 July
©©2020
2019 CoreLogic,
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Inc.All
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Reserved. Source: CoreLogic 6Rolling 28-day change in daily home value
index, combined capitals The CoreLogic daily home
2.0% value index showed a
1.5%
change of pace halfway
through March.
1.0%
0.5%
Data over the first two
weeks of May shows the
0.0% -0.05% combined capital cities
-0.5%
index is nudging into
month-on-month value
-1.0%
declines.
7/01/2020
4/02/2020
3/03/2020
21/01/2020
18/02/2020
17/03/2020
31/03/2020
14/04/2020
28/04/2020
12/05/2020
18 July
© 2020 © 2019 CoreLogic,
CoreLogic, Inc. All Reserved.
Inc. All Rights Rights Reserved. Source: CoreLogic 7The monthly trend in the daily hedonic is weakening, driven by
Melbourne and (to a lesser extent) Sydney
Daily CoreLogic home value index – rolling 28-day change
Sydney Melbourne Combined capitals
2.0% 2.0% 2.0%
1.5% 1.5% 1.5%
1.0% 1.0% 1.0%
0.07%
0.5% 0.5% 0.5%
0.0% 0.0% 0.0%
-0.05%
-0.5% -0.5% -0.5%
-0.46%
-1.0% -1.0% -1.0%
7/01/2020
4/02/2020
3/03/2020
7/01/2020
4/02/2020
3/03/2020
7/01/2020
4/02/2020
3/03/2020
21/01/2020
18/02/2020
17/03/2020
31/03/2020
14/04/2020
28/04/2020
12/05/2020
21/01/2020
18/02/2020
17/03/2020
31/03/2020
14/04/2020
28/04/2020
12/05/2020
21/01/2020
18/02/2020
17/03/2020
31/03/2020
14/04/2020
28/04/2020
12/05/2020
18 July
©©2020
2019 CoreLogic,
CoreLogic, Inc.
Inc.All
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RightsReserved.
Reserved. Source: CoreLogic 8Smaller cities are also generally losing momentum (apart from
Adelaide), with Perth slipping into negative month-on-month change
while Brisbane growth continues to lose momentum.
Daily CoreLogic home value index – rolling 28-day change
Sydney Melbourne Brisbane Adelaide Perth
2.0% 2.0% 2.0% 2.0% 2.0%
1.5% 1.5% 1.5% 1.5% 1.5%
1.0% 1.0% 1.0% 1.0% 1.0%
0.56%
0.5% 0.5% 0.5% 0.5% 0.5%
0.0% 0.0% 0.0% 0.0% 0.0%
0.18%
0.07%
-0.05%
-0.5% -0.5% -0.5% -0.5% -0.5%
-0.46%
-1.0% -1.0% -1.0% -1.0% -1.0%
21/01/2020
18/02/2020
17/03/2020
14/04/2020
12/05/2020
21/01/2020
18/02/2020
17/03/2020
14/04/2020
12/05/2020
21/01/2020
18/02/2020
17/03/2020
14/04/2020
12/05/2020
21/01/2020
18/02/2020
17/03/2020
14/04/2020
12/05/2020
21/01/2020
18/02/2020
17/03/2020
14/04/2020
12/05/2020
18 July
©©2020
2019 CoreLogic,
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Inc.All
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Reserved. Source: CoreLogic 9Clearance rates plunged following the announcement of policies
restricting on-site auctions, but have improved over recent weeks as
the number of withdrawn auctions eases and restrictions are relaxed
90%
Auction clearance rate v change in dwelling values, national 2.0%
80% 1.5%
70% 1.0%
60% 0.5%
50% 0.0%
40% -0.5%
30% -1.0%
clearance rate with 4 week trend monthly change in dwelling values
20% -1.5%
May 09
May 10
May 11
May 12
May 13
May 14
May 15
May 16
May 17
May 18
May 19
May 20
Sep 09
Jan 10
Sep 10
Jan 11
Sep 11
Jan 12
Sep 12
Jan 13
Sep 13
Jan 14
Sep 14
Jan 15
Sep 15
Jan 16
Sep 16
Jan 17
Sep 17
Jan 18
Sep 18
Jan 19
Sep 19
Jan 20
% of auctions withdrawn % of successful auctions sold prior
80% 100%
82.7%
60% 56.0% 80%
60%
40% 50.3%
26.4%
40%
20% 20%
0% 0%
May 15
May 16
May 17
May 18
May 19
May 20
May 15
May 16
May 17
May 18
May 19
May 20
Nov 15
Nov 16
Nov 17
Nov 18
Nov 19
Nov 15
Nov 16
Nov 17
Nov 18
Nov 19
* As a % of all auction results * As a % of all ‘sold’ auction results
18 July
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2019 CoreLogic,
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Inc.All
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Reserved. Source: CoreLogic 10CoreLogic estimates of settled sales fell by around 40% in
April as buyers and sellers retreated to the sidelines
Monthly sales with six month moving % change March to April 2020 % change April 2019 to April 2020
average, National
70,000 National -42.5% National -33.3%
Combined regionals -42.2% Combined regionals -34.3%
Combined capitals -42.7% Combined capitals -32.8%
60,000
Regional NT -9.5% Regional NT -24.0%
50,000 Regional Tas -46.5% Regional Tas -25.8%
Regional WA -54.5% Regional WA -52.8%
40,000 Regional SA -44.1% Regional SA -23.7%
Regional Qld -38.6% Regional Qld -37.4%
30,000 Regional Vic -37.4% Regional Vic -34.8%
Regional NSW -45.2% Regional NSW -31.4%
20,000 Canberra -37.9% Canberra -14.5%
Darwin -36.2% Darwin -19.3%
10,000 Hobart -47.6% Hobart -42.2%
Perth -66.9% Perth -67.9%
0 Adelaide -48.9% Adelaide -30.2%
Brisbane -34.8% Brisbane -35.3%
Melbourne -46.5% Melbourne -34.0%
Sydney -33.1% Sydney -19.2%
Note: recent months are modelled estimates, and are therefore subject to revision.
18 July
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Inc.All
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Reserved. Source: CoreLogic 11Sales volumes are declining significantly as consumer
confidence reaches its lowest levels since the early 90’s
recession
Monthly sales volumes and Westpac-MI consumer sentiment index
Modelled Sales Volumes, Monthly (LHS) Modelled Sales Volumes, 6-Month Average (LHS) Westpac-Melbourne Institute Consumer Sentiment Index (RHS)
70,000 140
60,000 120
50,000 100
40,000 80
30,000 60
20,000 40
10,000 20
0 0
Apr-90
Apr-91
Apr-92
Apr-93
Apr-94
Apr-95
Apr-96
Apr-97
Apr-98
Apr-99
Apr-00
Apr-01
Apr-02
Apr-03
Apr-04
Apr-05
Apr-06
Apr-07
Apr-08
Apr-09
Apr-10
Apr-11
Apr-12
Apr-13
Apr-14
Apr-15
Apr-16
Apr-17
Apr-18
Apr-19
Apr-20
Note: recent months on sales volume are modelled estimates, and are therefore subject to revision
18 July
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2019 CoreLogic,
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Inc.All
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Reserved. Source: CoreLogic, Westpac/Melbourne Institute 12The ANZ/Roy Morgan weekly reading on consumer sentiment has
fallen dramatically since social distancing policies were
implemented, but the indicator has recovered almost 70% of the
decline over the past six weeks
18 July
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Reserved. Source: ANZ/Roy Morgan 13Rental markets are likely to see larger declines than housing values due to higher supply at a time of lower demand.
Rents have generally shown a softer trajectory than housing
values, with early signs of weakness through April
Annual change in rents
12% 18% Sydney -0.7%
Melbourne 0.7%
Brisbane 0.9%
13% Adelaide 2.3%
7% Perth 1.6%
8% Hobart 1.0%
2.3% Darwin -1.2%
1.6% Canberra -0.1%
2% 3%
0.9% 1.0%
0.7% -0.1% Regional NSW 1.7%
-0.7% -2% -1.2% Regional Vic 2.3%
-3% Regional Qld 1.7%
Regional SA 1.5%
-7% Regional WA 4.6%
Regional Tas 4.1%
-8% -12% Regional NT -3.0%
Apr 10 Apr 12 Apr 14 Apr 16 Apr 18 Apr 20 Apr 10 Apr 12 Apr 14 Apr 16 Apr 18 Apr 20
Combined capitals 0.4%
Sydney Melbourne Brisbane Combined regionals
Hobart Darwin Canberra 2.0%
Adelaide Perth National 0.8%
18 July
©©2020
2019 CoreLogic,
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Inc.All
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Reserved. Source: CoreLogic 157 of the 8 capital cities recorded a fall in rents through April,
led by Hobart, down 1.1%. Perth was the only capital city to
record a rise in rents in April
Month on month change in rents
0.4%
0.1% 0.1%
0.0%
0.0% 0.0%
-0.2% -0.1% -0.1%
-0.4% -0.4%
-0.5% -0.5% -0.4% -0.5%
-0.7% -0.7%
-1.1%
Combined regionals
Regional Qld
Canberra
Combined capitals
Regional NSW
Darwin
Perth
Sydney
Regional NT
Regional WA
Hobart
Adelaide
Brisbane
National
Regional SA
Regional Vic
Regional Tas
Melbourne
18 July
©©2020
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Inc.All
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Reserved. Source: CoreLogic 16Rental yields are likely to be under some downwards pressure
as rents fall more than home values
Sydney yields are already at record lows (2.9%) and Melbourne yields aren’t far from a record
low.
Gross rental yields
6.5% 6.5% Sydney 2.9%
Melbourne 3.2%
6.0% Brisbane 4.4%
Adelaide 4.4%
5.5% Perth 4.3%
5.5%
Hobart 5.0%
5.0% Darwin 5.8%
Canberra 4.7%
4.5%
4.5% Regional NSW 4.6%
Regional Vic 4.5%
4.0% Regional Qld 5.2%
3.5% Regional SA 5.7%
3.5% Regional WA 6.1%
Regional Tas 5.2%
3.0% Regional NT 6.7%
Combined capitals
2.5% Combined regionals Combined capitals 3.4%
Apr 10 Apr 12 Apr 14 Apr 16 Apr 18 Apr 20 2.5% Combined regionals 4.9%
Apr 10
Apr 12
Apr 14
Apr 16
Apr 18
Apr 20
Sydney Melbourne Brisbane National 3.7%
Adelaide Perth Hobart 2020 2019
Darwin Canberra
18 July
©©2020
2019 CoreLogic,
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Reserved. Source: CoreLogic 17Already some rental markets have seen a significant uplift in
rent listings off the back of falling demand, and increased
supply, amid COVID-19
Change in total rental listings of select SA4 regions - 22nd of March to 26th April
Melbourne - Inner 36.2%
Sydney - City and Inner South 34.1%
Sydney - Eastern Suburbs 22.8%
Adelaide - Central and Hills 13.4%
Warrnambool and South West 13.0%
Gold Coast 12.5%
Sydney - Sutherland 10.4%
Melbourne - Inner South 10.0%
Sydney - Inner West 8.7%
Richmond - Tweed 8.6%
Melbourne - Inner East 7.2%
Newcastle and Lake Macquarie 7.2%
Sydney - North Sydney and Hornsby 6.9%
Geelong 6.2%
Murray 4.9%
Perth - Inner 4.7%
Australian Capital Territory 4.0%
Hobart 3.1%
Barossa - Yorke - Mid North 3.1%
Brisbane Inner City 2.7%
Hunter Valley exc Newcastle 2.7%
West and North West 2.6%
Sydney - Ryde 2.5%
Melbourne - North East 1.0%
Sunshine Coast 0.2%
0% 5% 10% 15% 20% 25% 30% 35% 40%
18 July
©©2020
2019 CoreLogic,
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Inc.All
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Reserved. Source: CoreLogic 18Across all industries, jobs have declined 6.0%, but the
effect is more acute in some parts of the economy
Changes in employee jobs by industry between 14th March and 18th April
-33.4% Accommodation and Food Services
-27.0% Arts and Recreation Services
-12.0% Other Services
-11.0% Rental, Hiring and Real Estate Services
-10.0% Administrative and Support Services
-9.5% Agriculture, Forestry and Fishing
-6.8% Retail Trade
-6.5% Information Media and Telecommunications
-6.4% Construction
-5.6% Professional, Scientific and Technical Services
-5.1% Public Administration and Safety
-4.4% Wholesale Trade
-4.1% Manufacturing
-3.0% Transport, Postal and Warehousing
-2.9% Health Care and Social Assistance
-2.9% Mining
-2.0% Education and Training
-1.0% Financial and Insurance Services
-0.2% Electricity, Gas, Water and Waste Services
-40% -35% -30% -25% -20% -15% -10% -5% 0%
18 July
©©2020
2019 CoreLogic,
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Inc.All
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Reserved. Source: ABS 19Regions with high concentrations of vulnerable workforces
generally have a higher incidence of renting households
Concentration of workforce in industries highly impacted by COVID-19, and portion of
renting households - SA4 Regions, Australia
80%
Estimated portion of dwellings that are rentals 70%
Melbourne - Inner
Sydney - City and Inner South
60% Sydney - Eastern Suburbs
Brisbane Inner City
Darwin
50% Sydney - Parramatta
Sydney - Inner West
Perth - Inner
40%
Gold Coast
30% Toowoomba
Sunshine Coast
Hobart
20%
Queensland - Outback
Western Australia - Wheat Belt
10%
0%
0% 2% 4% 6% 8% 10% 12% 14% 16%
Portion of workforce employed in accommodation and food services, and arts and recreation services
Source: ABS catalogue 6291. Note employment data of the portion of the workforce in arts and tourism is derived from the four quarter
average to February 2020
18 July
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Reserved. Source: CoreLogic, ABS 20Industry activity is showing signs of stabilising or even improving… albeit from low levels
Real estate agents have seen a significant drop in activity,
although activity has bounced back post Easter and
continues to trend higher
Rolling 7-day count of CMA activity, Australia
2019 v 2020
Trending higher, but down 29% on same
Pre-Easter: Down 60% on time last year as at May 11th
same time last year
Nov
Jan
Feb
Jun
Jul
Sep
Oct
Mar
Apr
May
Aug
Dec
Seven day count 2020 Seven day count 2019
18 July
© 2019 CoreLogic, Inc. All Rights Reserved. Source: CoreLogic 22New listing numbers have fallen sharply and could fall
further over the coming months
New Listings, rolling 28-day count, national Total Listings, rolling 28-day count, national
60,000 300,000
50,000 250,000
40,000 200,000
150,000 157,081
30,000
20,000 21,110 100,000 28 days ending May 10
-27% compared with last year
10,000 28 days ending May 10 50,000
-38% compared with last year
0 0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2016 2017 2018 2019 2020 2016 2017 2018 2019 2020
18 July
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Reserved. Source: CoreLogic 23New Listings % Total Listings %
change from same change from same
week last year week last year
Rest of NT -3.3% -8.5%
Rest of Tas -56.9% -31.8%
Rest of WA -45.3% -18.1%
Rest of SA -51.5% -13.9%
Every region has Rest of Qld. -35.9% -21.5%
Rest of Vic -42.8% -22.7%
recorded a sharp Rest of NSW -37.2% -25.3%
decline in new Canberra -36.0% -30.7%
listing numbers Darwin -52.5% -28.0%
Hobart -38.3% -27.6%
relative to a year Perth -41.6% -34.9%
ago Adelaide
Brisbane
-45.5%
-31.4%
-28.9%
-26.0%
Melbourne -36.0% -23.7%
Sydney -24.3% -27.1%
Combined Regional -39.5% -22.1%
Combined Capital Cities -34.0% -27.8%
National -38.2% -26.8%
18 July
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Inc.All
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Reserved. Source: CoreLogic 24Valuations activity was tracking lower from late March, with
activity only partially bouncing back post-Easter. The most
recent trend looks to be stabilising.
Number of valuation events, rolling 7-day count, Australia
22-Mar-20
Australia Day Valuation
long weekend activity is
current 33%
Easter 2020 below the
valuations activity down 37% week March 22
on week with a 48% bounce back peak
Easter 2019 - valuations activity the following week
down 58% week on week with a
141% bounce back over the Christmas / New Year period
following week
11 Mar 19 11 May 19 11 Jul 19 11 Sep 19 11 Nov 19 11 Jan 20 11 Mar 20 11 May 20
18 July
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2019 CoreLogic,
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Inc.All
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Reserved. Source: CoreLogic 25What are real estate agents thinking?
Summary of responses from real estate agents utilising the RP Data platform
The first three weeks of lockdown saw real estate agents reporting that buyer and
seller enquiry levels had more than halved. The most recent survey shows enquiry
levels may be stabilising
Have you noticed a change in the number of Have you noticed a change in the number of
buyer enquiries over the past week? seller enquiries over the past week?
62%
69%
68%
59%
54%
48%
36%
37%
23%
24%
21%
20%
17%
16%
15%
17%
14%
14%
13%
15%
11%
11%
10%
10%
9%
8%
9%
8%
6%
6%
6%
4%
4%
4%
4%
4%
4%
4%
4%
3%
3%
2%
2%
2%
2%
2%
2%
2%
2%
2%
1%
1%
1%
1%
1%
1%
1%
1%
1%
1%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
Down less than 10%
Down less than 10%
Down 25-50%
Down 10-25%
Up less than 10%
Up 10-25%
Down 25-50%
Down 10-25%
Up less than 10%
Up 10-25%
Down more than
Up 25% to 50%
Up more than 50%
Down more than
Up 25% to 50%
Up more than 50%
Relatively steady
Relatively steady
50%
50%
Wave 1 Wave 2 Wave 3 Wave 4 Wave 1 Wave 2 Wave 3 Wave 4
Wave 1: March 20-23 | Wave 2: March 27-30 | Wave 3: April 3-6 | Wave 4 Apr 27-Apr 29
18 July
©©2020
2019 CoreLogic,
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Inc.All
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Reserved. Source: CoreLogic 26What are real estate agents thinking?
Summary of responses from real estate agents utilising the RP Data platform
Expectations around buyer and seller activity look to stabilising
What is your expectation for buyer activity over What is your expectation for seller activity over
the next week? the next week?
90% 80%
77% 67%
80% 70%
69% 62%
70% 60% 57%
59%
60% 49%
51% 50%
46% 42%
50%
40%
40% 29% 27%
26% 30% 25%
30% 23% 23%
19% 20% 16%
20%
8% 7% 9%
10% 5% 4% 10%
1%
0% 0%
Worse Same Better Worse Same Better
Wave 1 Wave 2 Wave 3 Wave 4 Wave 1 Wave 2 Wave 3 Wave 4
Wave 1: March 20-23 | Wave 2: March 27-30 | Wave 3: April 3-6 | Wave 4 Apr 27-Apr 29
18 July
©©2020
2019 CoreLogic,
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Inc.All
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Reserved. Source: CoreLogic 27What are real estate agents thinking?
Summary of responses from real estate agents utilising the RP Data platform
Less gloomy: fewer real estate agents expect housing values to fall more than
10% and the large majority think the decline in home values will be confined
within a six month time frame
To what extent do you expect this Over what time frame do you expect this percentage
pandemic will affect residential change to take place?
property values? 38.1%
Wave 3 30% 31%
35% 37.8% 25.4%
29.9%
Wave 4 24%
21.4%
27% 28%
18.9% 13.5%
11.8% 10%
7%
2% 1.6% 2% 0.8% 1% 0.8% 1%
Decrease more than 20%
Decrease between 10 - 20%
Decrease bewteen 0 - 10%
Relatively steady
Increase between 1 - 5%
In the next 12 -
In the next 18 -
It's already
In the next 1 - 3
In the next 3 - 6
In the next 6 - 9
In the next 9 - 12
happening
18 months
24 months
months
months
months
months
Wave 3 Wave 4
Wave 1: March 20-23 | Wave 2: March 27-30 | Wave 3: April 3-6 | Wave 4 Apr 27-Apr 29
18 July
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Inc.All
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Reserved. Source: CoreLogic 28What are real estate agents thinking?
Summary of responses from real estate agents utilising the RP Data platform
Almost half of the property managers surveyed have seen an increase in lease
termination requests, while the large majority are experiencing a rise in rent
postponement requests or rental rate reduction requests
Over the last two weeks, have you noticed an Over the last two weeks, have you noticed an
increase in early lease termination requests? increase in payment postponement requests?
No
18%
Yes No
48% 52%
Yes
82%
Over the last two weeks, have you noticed an Over the last two weeks, have you noticed an
increase in rent reduction requests? increase
Yes
in evictions?
No
17%
17%
No
Yes 83%
18 July
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2019 CoreLogic,Inc.
Inc.All
AllRights
RightsReserved.
Reserved. Source: CoreLogic 29The next few months present an unprecedented shock to an economy with otherwise strong fundamentals. The institutional response is about ‘building a bridge’ to the recovery phase, with stimulus totaling about 16.5% of GDP
RBA cash rate
20% The RBA has lowered the
18%
cash rate to the effective
16%
lower bound, with official
14%
interest rates likely to hold
12%
10%
at this level until at least
8%
late 2023
6%
4.86% (30yr avg)
4% 3.72% (20yr avg)
2.46% (10yr avg)
2%
0.25% from
0% March 2020
May 90
May 95
May 00
May 05
May 10
May 15
May 20
18 July
© 2020 © 2019 CoreLogic,
CoreLogic, Inc. All Reserved.
Inc. All Rights Rights Reserved. Source: CoreLogic, RBA 31Average owner occupier mortgage rates came down 25
basis points over the month of March, while average
investor rates fell 26 basis points
RBA Cash Rate
8% 7.25%
6%
4.75%
4%
2.50%
3.00%
2%
1.50%
0% 0.25%
Apr 00 Apr 05 Apr 10 Apr 15 Apr 20
Avg Mortgage rate type by product, March 2020 Investor premium based on monthly average of new loans
Principal-and-interest 3.22%
4.0% Owner Occupiers Investors
Investor
Interest-only 3.49%
Fixed (3 years or less) 3.12%
3.5%
Variable 3.36% 3.32%
36 basis
Owner Occupier
Principal-and-interest 2.92%
3.0% 2.96% points
Interest-only 3.48%
Fixed (3 years or less) 2.75% 2.5%
Variable 2.99% Aug 19 Sep 19 Oct 19 Nov 19 Dec 19 Jan 20 Feb 20 Mar 20
Note: Data reported in the rate by product and borrower tables are based on the new RBA ‘Housing Lending Rates’ publication, based on Economic and
Financial Statistics (EFS) collection.
18 July
©©2020
2019 CoreLogic,
CoreLogic, Inc.
Inc.All
AllRights
RightsReserved.
Reserved. Source: CoreLogic, RBA 32The federal stimulus has However GDP is still forecast
seen the forecast for to drop by 8.5% over the Jun
unemployment reduce quarter and 0.6% through
from 17% by June to the Sep quarter before
around 9% surging 5.2% over Q4
Unemployment rate, Australia Quarterly change in GDP
17% (forecast prior to 6.0%
17% JobKeeper stimulus)
4.0%
15%
2.0%
13%
0.0%
11%
-2.0%
9%
-4.0%
7%
-6.0%
5% -8.0%
3% -10.0%
Dec 90 Dec 95 Dec 00 Dec 05 Dec 10 Dec 15 Dec 20 Dec 90 Dec 96 Dec 02 Dec 08 Dec 14 Dec 20
Source: CoreLogic, Westpac
18 July
©©2020
2019 CoreLogic,
CoreLogic, Inc.
Inc.All
AllRights
RightsReserved.
Reserved. 33Employment fundamentals will be another important
determinant of the extent that housing demand is impacted
Portion of workforce employed in most impacted sectors
By Capital City
12.7%
10.8%
9.7%
9.2%
8.7% 8.6% 8.4%
7.9%
Hobart Brisbane Darwin Sydney Adelaide Perth Melbourne ACT
18 July
©©2020
2019 CoreLogic,
CoreLogic, Inc.
Inc.All
AllRights
RightsReserved.
Reserved. Source: ABS. Note the industries used to calculate 'most impacted sectors’ are accommodation and food services and arts and recreation services 34Housing demand will be materially impacted by a stalling in
overseas migration
Annual change in number of overseas arrivals Net overseas migration by capital city 2018/19
50% 77,369
73,919
40%
30%
20%
10%
0%
-10%
18,789
-20% 13,970 12,900
-30% 3,110 1,726 542
-40%
-44.5%
-50%
Mar 80 Mar 85 Mar 90 Mar 95 Mar 00 Mar 05 Mar 10 Mar 15 Mar 20
18 July
©©2020
2019 CoreLogic,
CoreLogic, Inc.
Inc.All
AllRights
RightsReserved.
Reserved. Source: CoreLogic, ABS. 35Across all industries, jobs have declined 6.0%, but the
effect is more acute in some parts of the economy
Changes in employee jobs by industry between 14th March and 18th April
-33.4% Accommodation and Food Services
-27.0% Arts and Recreation Services
-12.0% Other Services
-11.0% Rental, Hiring and Real Estate Services
-10.0% Administrative and Support Services
-9.5% Agriculture, Forestry and Fishing
-6.8% Retail Trade
-6.5% Information Media and Telecommunications
-6.4% Construction
-5.6% Professional, Scientific and Technical Services
-5.1% Public Administration and Safety
-4.4% Wholesale Trade
-4.1% Manufacturing
-3.0% Transport, Postal and Warehousing
-2.9% Health Care and Social Assistance
-2.9% Mining
-2.0% Education and Training
-1.0% Financial and Insurance Services
-0.2% Electricity, Gas, Water and Waste Services
-40% -35% -30% -25% -20% -15% -10% -5% 0%
18 July
©©2020
2019 CoreLogic,
CoreLogic, Inc.
Inc.All
AllRights
RightsReserved.
Reserved. Source: ABS 36Summary
• Most Australian housing markets were generally into the next upswing phase of the cycle
before the onset of COVID-19.
• Property is less volatile and slower to respond to market shocks than equities, and values will
be susceptible to the state of the labour market and the flow of distressed properties onto
the market in the medium-to-long term.
• Housing values are provided some support via leniency policies for distressed borrowers, low
advertised stock levels, low mortgage rates and significant stimulus measures.
• But clear downside risk is attributable to high rates of unemployment, coupled with a fragile
household sector and the potential for higher mortgage arrears after repayment holidays are
over. Additionally, stalling migration will detract from housing demand.
• Transaction activity has been significantly impacted by low consumer confidence and social
distancing measures. Australians are likely to put high commitment decisions on hold until
confidence returns to levels closer to ‘normal’.
• With the virus curve flattened much more quickly and effectively than expected, some
restrictive policies are already being lifted which could see housing sentiment lift earlier than
expected.
18 July
©©2020
2019 CoreLogic,
CoreLogic, Inc.
Inc.All
AllRights
RightsReserved.
Reserved. 37Disclaimer
In compiling this publication, RP Data Pty Ltd trading as CoreLogic has relied upon information supplied by a number of external sources. CoreLogic does not warrant its accuracy or completeness and to the full extent allowed by law excludes
liability in contract, tort or otherwise, for any loss or damage sustained by subscribers, or by any other person or body corporate arising from or in connection with the supply or use of the whole or any part of the information in this
publication through any cause whatsoever and limits any liability it may have to the amount paid to CoreLogic for the supply of such information.
Queensland Data
Based on or contains data provided by the State of Queensland (Department of Natural Resources and Mines) 2020. In consideration of the State permitting use of this data you acknowledge and agree that the State gives no warranty in relation
to the data (including accuracy, reliability, completeness, currency or suitability) and accepts no liability (including without limitation, liability in negligence) for any loss, damage or costs (including consequential damage) relating to any use of the
data. Data must not be used for direct marketing or be used in breach of the privacy laws.
South Australian Data
This information is based on data supplied by the South Australian Government and is published by permission. The South Australian Government does not accept any responsibility for the accuracy or completeness of the published information
or suitability for any purpose of the published information or the underlying data.
New South Wales Data
Contains property sales information provided under licence from the Land and Property Information (“LPI”). CoreLogic is authorised as a Property Sales Information provider by the LPI.
Victorian Data
The State of Victoria owns the copyright in the Property Sales Data which constitutes the basis of this report and reproduction of that data in any way without the consent of the State of Victoria will constitute a breach of the Copyright Act 1968
(Cth). The State of Victoria does not warrant the accuracy or completeness of the information contained in this report and any person using or relying upon such information does so on the basis that the State of Victoria accepts no responsibility
or liability whatsoever for any errors, faults, defects or omissions in the information supplied.
Western Australian Data
Based on information provided by and with the permission of the Western Australian Land Information Authority (2020) trading as Landgate.
Australian Capital Territory Data
The Territory Data is the property of the Australian Capital Territory. No part of it may in any form or by any means (electronic, mechanical, microcopying, photocopying, recording or otherwise) be reproduced, stored in a retrieval system or
transmitted without prior written permission. Enquiries should be directed to: Director, Customer Services ACT Planning and Land Authority GPO Box 1908 Canberra ACT 2601.
Tasmanian Data
This product incorporates data that is copyright owned by the Crown in Right of Tasmania. The data has been used in the product with the permission of the Crown in Right of Tasmania. The Crown in Right of Tasmania and its employees and
agents:
a) give no warranty regarding the data's accuracy, completeness, currency or suitability for any particular purpose; and
b) do not accept liability howsoever arising, including but not limited to negligence for any loss resulting from the use of or reliance upon the data.
Base data from the LIST © State of Tasmania http://www.thelist.tas.gov.au
18 July
© 2019 CoreLogic, Inc. All Rights Reserved. 38Get in Touch Courtney Blackburn Principal, Client Executive CoreLogic Direct +61 2 8019 8214 Mobile +61 410 660 528 Courtney.Blackburn@Corelogic.com.au
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