The PRD Australian Economic and Property Report found the market has managed to hold its value, despite predictions prices could fall by up to 30% due to COVID-19 shutdowns.
After devastating drought and bushfires, the property market was still managing to recover in the latter part of 2019 and first two months of 2020.
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The report found on average, median house prices grew for capital, metropolitan, and regional markets in the 12 months to the first half of 2020.
Regional markets performed best, up by 3.4%, while capital cities grew by 1.0% on average, led by Sydney, Melbourne and Hobart.
PRD Real Estate Chief Economist, Dr Diaswati Mardiasmo, said she believes the market has shown great resilience despite everything that was thrown at it in the past 12 months.
“Whilst COVID-19 hit us swiftly this year and threw Australian economy and property markets into turmoil, things settled down within the property market quicker than initially thought," she said.
Dr Mardiasmo added this didn't mean a return to normality, with Government stimulus propping up the property market and offsetting the fallout from the pandemic.
Since the Reserve Bank made a total of 125 basis point cuts to the cash rate since June 2019, upgraders and first home buyers have been taking advantage of historically-low interest rates on home loans.
The report found upgraders accounted for 42.0% of loans in June 2020, and first home buyers accounted for 21.0% of loans in the same period, the highest level since 2013.
New home sales increased by 77.6% as of June 2020, from a record low result in May, and the HomeBuilder scheme looks to be balancing the downturn in residential construction.
Dr Mardiasmo said there was no doubt we were seeing signs of gradual improvement, but uncertainty about health and the economy meant many households and businesses were still cautious.
“The key going forward will be increasing levels of employment, public and private investment and consumer confidence based on the ongoing impact of COVID-19," Dr Mardiasmo said.
"This sets the scene as we walk the tightrope to full economic recovery."
First home buyers out in force in New South Wales
The report found first home buyer activity remained strong in the 12 months to the March quarter of 2020, increasing by 33.3%.
This increase was labelled surprising as home loan affordability declined by 10.3% in the same time, but this was offset by various Federal and State Government stimulus.
New South Wales metropolitan area settled sales grew by 24.6% in the 12 months to May, the strongest of all metro markets nationally.
The same area had the strongest median house price growth in New South Wales, up by 12.2%.
In good news for renters, Sydney recorded the greatest softening in median two-bedroom unit rental price, by -3.6% in the 12 months to the March quarter of 2020.
Victoria more affordable than New South Wales
The report found Victoria's home loan affordability declined by only 7.6% in the 12 months to the March quarter of 2020, compared to New South Wales decline of 10.3%.
The report said this made it an ideal place for first home buyers and activity in the group was strong, increasing by 24.4% and having the most loans for the group approved nationally (8,624).
Victoria was also one of the most resilient markets in residential construction, softening by only 4.3% over the same period.
Melbourne recorded steady growth in its median two-bedroom unit rental price, up by 2.2% in the 12 months to the March quarter of 2020.
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