In the last two years when talking about the SARS-CoV-2 virus and COVID-19 the focus has been on the number of people falling ill or dying, jobs lost, schools closed, difficulty in accessing vaccines or diagnostic services, the shortage of goods & services and economic impacts felt at a micro or macro level.
In commenting on change this pandemic has wrought, access to housing and household wealth sometimes rate a mention. Here is a quick sketch of two of the building blocks underpinning that aspects of our lives at state and national level.
The NSW Valuer-General determines land values across the state.
Over 40,000 property sales were analysed to determine land values as of 1 July 2020.
Overall land values increased across New South Wales by 3.6% from $1.70 trillion to $1.80 trillion in the 12 months leading up to 1 July.
However, not all sectors saw a growth in land values.
Although residential land values across the state saw an overall increase of 4.0% (coming back from a fall in 2019), with industrial land seeing an overall value increase of 5.5% along with a total 4.8% rise in the combined value of rural land - it was another story for commercial land.
Commercial land values experienced an overall decrease of 6.6% which according to VG News: July 2021 was "largely due to the impact of the COVID-19 pandemic". Having received greater disruption than the residential land sector.
House prices in most capital cities had been expected to experience a cyclical upswing in 2020 but the onset of the pandemic saw house prices contracting in all capital cities except Canberra in the June Quarter 2020. However the Reserve Bank's cash rate reductions, lower interest rates and government policy responses saw the market bounce back, according to KPMG Economic's paper The Impact of COVID-19 on Australia's Residential Property Market in 2021.
The expected Australian population reduction of over 1 million people by the end of this decade compared to pre-pandemic population forecasts is beginning to be felt across the economy and, along with an anticipated return to equilibrium and higher mortgage rates is predicted to temper the housing market for the next 2-3 years.
Despite these factors affecting the housing market in 2022 and 2023, KPMG’s analysis predicts that house prices are expected to be between 4-12% higher and unit values are expected to be between 0-13% higher than would have been the case in the absence of COVID-19.
For renters in capital cities there appears to have been an overall but seemingly temporary fall in rent payable - between March and November 2020, capital city unit rents dropped by 5.4 per cent, while house rents increased by 1.1 per cent.
This pattern is relatively consistent across all capitals though the difference is most significant in Melbourne and Sydney where unit rents fell 7.6 per cent and 6.6 per cent respectively while house rents have seen a much smaller reduction of around 1 per cent.
These March to November falls in rents did not seem to occur in regional areas in NT, Qld, NSW Vic, Tas, SA or WA in analysis supplied in AHURI Final Report No. 354: Pathways to regional housing recovery from COVID-19, April 2021.
By 20 January 2022 realestate.com.au was beating a commercial drum stating that the housing market had been booming since November 2021 - due in part to an alleged rise in investor confidence, the "influx of expats", limited housing stock and low interests rates, along with a demand for more space and a regional exodus from cities.
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| Wooli NSW |
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| Yamba NSW |
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| Iluka NSW |
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| Evans Head NSW |
Here are four of the housing market profiles found in the 2021 Suburb Report Card interactive which can be found here. Click on images to enlarge.
POPULATION BACKGROUND
An Australian Bureau of Statistics (ABS) media release of September 2021 and linked data stated that there were 293,500 births and 162,500 deaths from 31 March 2020 to 31 March 2021.
The resulting natural increase was down 4 per cent from the previous year and continued the trend of a gradual decline over the past 5 years, driven mainly by decreasing births.
However, due to international border closures a natural increase of 131,000 people was the predominate population growth during that March to March period.
Again according to the ABS Regional internal migration estimates, provisional October 2021:
In the March 2021 quarter there was a net loss of 11,800 people from Australia's greater capital cities through internal migration. This was the largest net loss on record since the series started in 2001, surpassing the previous record net loss set in the September 2020 quarter (-11,200).
The net loss was the result of 54,400 arrivals.... and 66,300 departures (up slightly from 66,000) to non-capital city areas.
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