Melbourne’s house prices were the hardest hit in the country for the month of August, falling by 1.4 per cent.
There are concerns it’s a taste of further things to come as the government looks at winding back its economic support measures.
The second lockdown obviously hurt our capital city and house values here have fallen 4 per cent through the past quarter and 2.5 per cent for the year so far.
In Sydney, house values dropped 0.5 per cent for the month while in the other states, which all are faring much better with the pandemic, prices either slightly rose or stayed flat.
CoreLogic head of research Tim Lawless pointed to the obvious connection between falling house prices and Melbourne’s second lockdown when he spoke to The Age.
"The performance of housing markets are intrinsically linked with the extent of social distancing policies and border closures which also have a direct effect on labour market conditions and sentiment," he said.
"It's not surprising to see Melbourne as the weakest housing market considering the extent of the virus outbreak, and subsequent restrictions, which have weakened the economic performance of Australia."
Mr Lawless said regional housing markets were performing better than their metropolitan counterparts.
"Regional markets may also be appealing for their relatively low density and lower price points," he told The Age.
"The normalisation of remote work through the pandemic could make proximity to major cities less of a factor in home purchasing decisions."
August was the last full month for the federal government’s full JobKeeper wage payment and coronavirus supplement for welfare recipients.