News

Melbourne's blue chip suburb house prices hit hardest by coronavirus

21 August 2020

Of all the property blows that have been landed since the onset of the COVID-19 pandemic, it’s houses in Melbourne’s high-end suburbs that have copped it the worst.

Houses in Melbourne’s million-dollar trophy suburbs have lost up to 12 per cent of their value since the start of coronavirus.

The median house price in Fitzroy North for example has dropped by 11.6 per cent to $1,441,213 in the last four months.

It’s a similar story in Albert Park and Fitzroy, which both have suffered falls in their median house price of around 1 per cent.

And the news gets worse for these ritzy areas, with Kay & Burton prestige real estate agent Jamie Mi telling Australian Financial Review the falls were probably even deeper than these CoreLogic figures.

“From what I’m seeing, values have probably dropped by 15 per cent already because local demand has dried out and the international buyers can’t travel to Australian” he said.

“We’re getting some enquiries from overseas, but not much sales, so the market is pretty stale at the moment.

“We might see more transactions after we come out of the lockdown, but I think prices will still drop because of mounting financial pressures due to the virus.”

CoreLogic’s Eliza Owen confirmed it was the most expensive quartile of the property market that as leading the downturn.

“Higher-value markets tend to be more reactive to changes in the economic environment, having led both the upswing and the downturn over previous cycles,” she told AFR.

“The COVID-related downturn has seen this trend playing out again, with Sydney’s upper quartile values down 2.5 per cent over the past four months.

“Similarly, Melbourne’s upper quartile values have fallen by 5.2 per cent. Melbourne has sometimes led cycles and has often been more volatile, with data suggesting that the city’s housing market has experienced a turn before others do.

“Research also indicates that property markets where incomes are higher, households are more indebted and investor activity is higher can also be more sensitive to changes in economic conditions” she told AFR.

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