Home prices still growing despite virus
Home prices have yet to take a hit from the economic turmoil spurred by coronavirus and instead rose marginally over March.
Property research group CoreLogic's latest hedonic home value index released today revealed Sydney home prices increased an average 1.1 per cent over the month.
The median price of a home is now just shy of $883,000, 13 per cent higher than it was at this time last year.
There were price rises across every city region bar one - the Sutherland Shire, where prices dropped an average 0.1 per cent for the month.
The highest increase was recorded in the Ryde area, where prices inched up 2.4 per cent, followed by the north shore and Blacktown, where rises were 1.4 per cent.
CoreLogic head of research Tim Lawless said the recent price rises did not mean the housing market would be immune to the coronavirus pandemic and a slowdown was imminent.
"The extent of the impact on dwelling values remains uncertain," Mr Lawless said.
"Capital growth trends will be contingent on how long it takes to contain the virus, and whether additional constraints on business or personal activity are introduced."
Mr Lawless also warned the March sales activity may not give a full indication of the health of the market since fewer sales occurred after bans were announced on open for inspections and on-site auctions.
The bans, along with lower market sentiment, would likely discourage buyers and sellers from engaging with the market.
"We expect the number of residential property sales to fall dramatically over the coming months - a consequence of tanking consumer confidence, a rising jobless rate, and more cautious lending practices," Mr Lawless said.
Real Estate Institute of NSW chief executive Tim McKibbin said the speed sentiment flipped last month was "astonishing".
"The market is not yet plunging but we're in a different place to where we were a few weeks ago when things seemed to be flying," he said.
HSBC's chief economist for Australia and New Zealand Paul Bloxham recently told reporters that predicting house prices wasn't possible at the moment because COVID-19 was creating so much turmoil in the economy.
Mr Lawless agreed predicting the trajectory of prices was "impossible".
"The extent of any fall in housing values is impossible to fathom without first understanding the length of time this health and economic crisis persists," he said.
"Arguably, the longer it takes to contain the virus and bring economic operations back to normal, the higher the downside risk to housing values."
SQM Research director Louis Christopher said it was not clear how far prices would drop but the market would likely rebound after whatever hit it took due to low interest rates and pent up buyer demand.
"All this stimulus will make a big difference once we're through the eye of the storm," Mr Christopher said.