Regional house prices have more than doubled and home values have surged nationwide post-pandemic, but a normalising market is still suffering from its version of long-COVID five years after the virus shut borders and kept workers at home.
Home values jumped by a third in less than two years at the height of the surge, with basement-level interest rates and people desperate for more space.
Looking back on the COVID-19 pandemic five years on, CoreLogic research director Tim Lawless said the impacts of the disruptive period were still being felt.
However, the housing market is levelling off, adjusting to stabilising migration, and interest rates unlikely to decrease as quickly as they rose.
“One of the most significant factors five years on from March 2020 is how housing values have changed,” Lawless said in research released on March 14.
“Nationally, home values have been on a roller-coaster ride.”
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The ride has delivered thrills for owners and fear for renters as affordability worsened.
Home values in capital cities jumped about a third, driven by higher increases in mid-market cities such as Perth, Adelaide, and Brisbane.
However, the desire for more space and the need to work from home boosted values from a lower base in regional areas, where home values increased more than 50 percent.
The space race also contributed to units lagging houses, increasing in value by about 20 percent, compared to 44 percent.
“House values have generally shown a stronger growth trend than units, but not to the extent we saw during the pandemic,” Lawless said.
But workers looking to get a foot on the property ladder have found it hard to keep up.
“Wages have risen by less than half the increase of housing since the onset of COVID, leading to widespread affordability challenges in most areas,” Lawless said.
Melbourne, which endured long lockdowns throughout the pandemic, had more subdued growth, with values increasing 8.4 percent.
Taxes played a role too, as did the return of migrants, who were more likely to be renters, but Victoria also had more new homes completed, which Lawless said was a reminder of how new supply could keep a lid on housing affordability.
The national median rent is $177 (US$111.6) a week higher than in March 2020, with the largest increase in Perth, where rents had declined 10 percent in the five years leading up to the pandemic.
