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Sydney, Melbourne house prices drop despite easing of COVID-19 restrictions on open homes, auction

Sydney and Melbourne house prices have fallen by $10,000 in one month despite the easing of coronavirus restrictions on open homes and public auctions.

Property prices in Australia's biggest cities have been resilient throughout the COVID-19 pandemic so far.

While the worst of the lockdowns may be over, the effects on real estate are only just beginning.

Median house prices in Sydney fell by 0.6 per cent in May, marking the first monthly drop in a year, CoreLogic data showed.

Median house prices in Sydney fell by 0.6 per cent in May, marking the first monthly drop in a year, CoreLogic data showed. Home values dropped by almost $10,000 in just four weeks to $1.017million. Pictured is a unit that was sold at Cronulla in Sydney's south

Home values dropped by almost $10,000 in just four weeks to $1.017million. 

How COVID-19 rules are affecting house prices

Sydney: down 0.6 per cent or $9,692 to $1,016,726

Melbourne: down 1.1 per cent or $9,532 to $809,274

Brisbane: flat at $559,975

Perth: down 0.6 per cent or $4,155 to $461,366 

Adelaide: up 0.4 per cent or $2,045 to $478,294  

Source: CoreLogic Hedonic Home Value Index data for median house prices, May 2020

Melbourne's mid-point house prices fell by an even more dramatic 1.1 per cent in May, with values falling for the second consecutive month to $809,274 - or also by almost $10,000.

The Victorian metropolis was the only capital city market to suffer a fall in April but in May, property prices also dropped in Sydney, Perth and Darwin. 

The slide in house prices occurred even though state governments allowed public auctions and open home inspections to resume in May with social distancing and crowd limits in place. 

The news on the coronavirus effect on property was released amid speculation the federal government would offer $40,000 handouts to first-home buyers to either build or renovate their house or apartment as part of a possible $4billion package.

Prime Minister Scott Morrison confirmed his Treasurer Josh Frydenberg was working on a stimulus measure to prop up the home construction sector.

'We've been looking closely at the residential building sector,' he told Sydney radio 2GB broadcaster Ben Fordham.

Melbourne's mid-point house prices fell by an even more dramatic 1.1 per cent in May, with values falling for the second consecutive month to $809,274 - or also by almost $10,000

'We're not making announcements on that today but the Treasurer's been doing some good work with some of the states as well who are interested in working on those issues.'

The early stages of coronavirus are particularly affecting NSW, with the value of construction work diving by 17.3 per cent in the year to March.

This was the worst annual decline in 19 years, the Australian Bureau of Statistics data showed.

The COVID-19 pandemic is also affecting house prices in other capital cities, although to a lesser extent.

In Brisbane, house prices were last month flat at $559,975 while in Perth, they fell 0.6 per cent to $461,366. Pictured is a house inspection at Bulimba in May 2020 as COVID-19 restrictions were eased

In Brisbane, house prices were last month flat at $559,975 while in Perth, they fell 0.6 per cent to $461,366.

Darwin suffered the biggest drop of 0.9 per cent, with median house prices now at $473,861.  

House prices, however, continued to rise in some cities with Hobart's median value rising by 0.8 per cent to $514,496.

Canberra's equivalent price last month rose 0.7 per cent to $716,663 in the national capital where the federal public service is the main employer.

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