How have each of the capital cities reacted to the onset of COVID-19? Let’s look at the data.

Melbourne has been hit the hardest, and with the recent implementation of Stage 4 restrictions, that shouldn’t be a surprise to anyone. Since March, dwelling values have dropped 3.5%. At the risk of sounding like a broken record, it’s important to consider that number against how other asset classes have performed – the ASX 200 is down 4% in that same time period. Melbourne was also coming off the back of 10% gain from July 2019 to pre covid.

All other capital cities have performed noticeably better. Perth is down 2%, Sydney is down 1.7%, Brisbane has remained relatively stable at just 0.6% down.

Darwin went up in April and June but has come back down, and is sitting unchanged compared to March.

Adelaide, Hobart, and Canberra are all up, at 0.7%, 0.8%, and 1.3% respectively.

An important statistic to keep an eye to predict property market performance is the unemployment rate. The RBA has noted that for each rise in unemployment of 1%, the rate of 90-day mortgage arrears will increase by 0.8%. An increase in mortgage arrears results in distressed sales, and distressed sales result in price decreases.

Keeping the unemployment rate low should be our goal as a nation to ensure we get through this recession in the best shape possible.