Sydney fared better but even there house values dipped by 0.5 per cent in August to be 2.4 per cent lower over the quarter. So far this year, they are still up by 1.7 per cent.
Unit values in Sydney fell by 0.3 per cent last month to be 1.6 per cent lower through the quarter. They are still up by 1.7 per cent through 2020.
Outside the two large property markets, other cities and regions did much better. House values lifted by 1.1 per cent in Darwin and by 0.5 per cent Canberra while they were flat in Perth, Adelaide and Brisbane.
Nationally, dwelling values fell by 0.4 per cent to be 1.7 per cent down over the quarter.
CoreLogic’s head of research Tim Lawless said Melbourne was being directly affected by the most recent lockdown, with home values there down by 4.6 per cent since the advent of the pandemic.
“The performance of housing markets are intrinsically linked with the extent of social distancing policies and border closures which also have a direct effect on labour market conditions and sentiment,” he said.
“It’s not surprising to see Melbourne as the weakest housing market considering the extent of the virus outbreak, and subsequent restrictions, which have weakened the economic performance of Australia.”
Mr Lawless said regional markets were out-performing capital cities. Regional NSW dwelling values lifted 0.4 per cent in the quarter while regional Victorian values dipped by a modest 0.5 per cent.
“Regional markets may also be appealing for their relatively low density and lower price points,” he said.
“The normalisation of remote work through the pandemic could make proximity to major cities less of a factor in home purchasing decisions.”
August is the last full month for the federal government’s full JobKeeper wage subsidy and the coronavirus supplement for people on welfare.
Financial comparison company Canstar on Tuesday warned the reduction in support measures could result in panic selling in some parts of the country.
Canstar finance expert Steve Mickenbecker said strained property owners could use the traditional September selling season to improve their finances by selling their homes.
“With JobKeeper and JobSeeker winding back from September and many mortgage holders nearing the end of repayment pauses with their banks, September will be a testing time,” he said.
Shane is a senior economics correspondent for The Age and The Sydney Morning Herald.