Australian property prices -1.8% in Q2; 6.2%yr

Australian capital city property prices according to the latest data from the ABS corrected modestly (-1.8%) in the June quarter amid the sharpest contraction in economic activity on record, heightened uncertainty, and disrupted activity in the housing market as open house inspections and public auctions were prohibited during the national shutdown. This followed a period of three consecutive quarters of price gains that had seen the annual pace of growth rise to a 2½-year high at 7.4%, which has now moderated to 6.2%. More timely data recently reported by CoreLogic showed that price declines across most capitals had slowed by August as turnover started to build up again, though Melbourne was the exception where the weakness had not eased due to the reinstatement of the statewide shutdown.

The full summary of quarterly and annual price changes across the house and unit segments for each capital city market is provided below. Note that the ABS reported that the quarterly outcomes in Hobart and Darwin have been imputed due to an insufficient volume of transactions to adhere to the usual methodology.   

A downturn in the national property price cycle turned from the second half of last year as uncertainty around tax policy abated post the Federal election and the RBA recommenced its easing cycle. The Sydney and Melbourne markets led the upswing and thus saw the sharpest corrections in the June quarter. Prices in Sydney (-2.2%) and Melbourne (-2.3%) declined by similar magnitudes in Q2, skewed towards weakness in the house segment in both markets. Annual price growth in the two major markets remained strong but has slowed; Sydney from 10.0% to 8.1% and Melbourne from 10.4% to 8.8%, noting that the base period coincides with the 2019 trough. 

More modest declines came through in Brisbane (-0.9%), Adelaide (-0.8%) and Perth (-0.7%) in the June quarter. These markets had not seen the same extent of support as in Sydney and Melbourne when the price cycle turned and as a result, the pace of annual growth stayed relatively muted compared to a year earlier; Brisbane 2.3% (from 2.5%), Adelaide 0.7% (from 0.9%) and Perth -0.2% (from -0.9%). Meanwhile, the Canberra market went against the broader trend as prices in the nation's capital lifted by 0.8% to be up by 3.6% and at a near two-year high.