Housing values nationwide have dropped for a second consecutive month in June, according to the July edition of Corelogic’s Home Value Index.

Following a 0.4% decline in May, the index recorded a 0.7% decline in June.

Each of the 5 largest capital cities recorded a decline over the month with Melbourne and Perth topping the range with a drop of 1.1%.

Let’s unpack this a little more.

Melbourne was down by 1.1% in June and 2.3% over the quarter and Sydney down by 0.8% in June and also 0.8% for the quarter.

In both cities the upper quartile has dropped most and the lower quartile the least, which is something we commonly see given that in upward trends the upper quartiles also raised the quickest and the most.

Putting it all in perspective, Melbourne is still up 10.2% over the past 12 months and Sydney 13.3%.

Despite the values being slightly down in June, market activity is up for a second month in a row.

After a 21.5% surge in sales activity in May, the estimate for June showed activity up a further 29.5%. Corelogic Head of Research, Tim Lawless said: “The downwards pressure on home values has remained mild to-date, with capital city dwelling values falling a cumulative 1.3% over the past two months.”

In my opinion, there are a number of reasons why the values are holding so strong: Low advertised stock levels, significant government stimulus, low interest rates and the repayment holidays from the lenders, which helped to keep the urgent sales off the market.

Looking ahead, there is some anxiety out there in anticipation of what will happen with the significant government support in September.

My gut feeling is that the government won’t turn off the tap entirely but will likely come with support measures intended directly for the people who need it most, not the blanket rule they had to come up with fast when things took a turn for the worse in March.

This way the people who need it most will still get plenty of support and the people that need it much less also get much less.

I’ll keep an eye out on any announcements in regards to this and will update you accordingly.