(Australian Associated Press)
Regional house prices are expected to outperform those in the capital cities as more Australians seek rural and beachside lifestyles to flee the coronavirus pandemic.
The CoreLogic national home value index fell by 0.6 per cent in July.
Some economists expect overall house prices to fall by between five and 10 per cent over coming months, as government supports and mortgage debt holidays taper off.
But CommSec senior economic Ryan Felsman said while price declines are broadening across capital cities, regional dwelling prices held up in July.
“The pandemic appears to be resulting in a change of mindset for some big city urban dwellers,” he said.
“In July, home prices in the Blue Mountains and NSW central coast were up modestly.
“The allure of more affordable housing, remote working arrangements and superior lifestyle choices are already showing up in relatively stable home prices and lower rental vacancies in both regions of NSW.”
Canberra’s home prices rose by 0.6 per cent in July – the seventh successive month of price increases – with buyer and renter searches witnessing surges in recent months.
In the big cities, house prices fell the most in Melbourne – by 1.2 per cent – which was almost double the national decline.
Sydney was down 0.9 per cent, Perth 0.6 per cent, Brisbane 0.4 per cent, Darwin 0.3 per cent and Hobart 0.2 per cent.
The figures come as the Reserve Bank is expected to leave the cash rate on hold at 0.25 per cent at Tuesday’s board meeting.
In May, the RBA forecast annual economic growth to slump eight per cent in the year to June, as the nation suffers its first recession in nearly 30 years.
One area of the economy holding up is manufacturing, with the AiGroup’s Performance of Manufacturing Index rising by two points to 53.5 in July.
Any reading above 50 indicates an expansion in activity.
AiGroup reported food and beverage makers were seeing stabilising demand, while the instant asset tax write-off increased sales for machinery manufacturers.
Retail spending data released on Tuesday is expected to confirm recently released preliminary figures from the Australian Bureau of Statistics, with a 2.4 per cent rise in June.
This builds on the 16.9 per cent rebound in May after the hefty 17.7 per cent plunge in April.
However, economists expect quarterly retail trade figures will decline by 1.5 per cent.
Treasurer Josh Frydenberg warned of pain to come as Victoria imposed tighter restrictions.
“This is a real kick in the guts to businesses and it’s going to have a major impact on (the state which represents) a quarter of the national economy,” he told the ABC.