More FHLDS options amid falling unit prices

The property data and analytics company has analysed median dwelling values to identify which city suburbs have seen the median value of established property fall below the First Home Loan Deposit Scheme (FHLDS) thresholds since the onset of COVID-19.

The analysis comes following the announcement that the federal government is to reissue approximately 1,800 unused guarantees from the first tranche of the First Home Loan Deposit Scheme “in the coming days”, with several lenders already having opened waitlists for the reissuances.

According to CoreLogic, as of January 2020, there was an average of 107 suburbs observed in the capital cities with a median value at or below the qualifying established property threshold for the FHLDS (assuming the application is for established property).

CoreLogic reviewed suburbs where there had been at least 50 transactions across the suburb over the past 12 months, and where the values had dropped to below threshold levels since the pandemic began (between March 2020 and January 2021).

It found that, in the vast majority of cases, falling unit prices had brought more units under the threshold.

According to CoreLogic, falling unit prices were particularly notable in capital cities. It attributed this to a range of factors, including a lack of demand from overseas migrants, including international students.

South Brisbane has seen a -$14,605 decline in median value as did Perth’s South West suburb, Munster (-$49,036).

Several suburbs of Sydney and Melbourne, which traditionally may not have fallen under the thresholds, now do.

Sydney

Sydney suburbs which have declined to be below the FHLDS threshold in January 2021, include:

• Kellyville — $675,780 (down by $71,882 since March 2020)
• Rouse Hill — $638,755 (-$88,146)
• Hurstville — $651,924 (-$65,019)
• Arncliffe — $690,441 (-$31,185)
• Ashfield — $689,884 (-$28,065)
• Strathfield — $688,341 (-$57,899)
• Wentworth Point — $686,114 (-$28,905)
• Gladesville — $698,034 (-$53,524)
• Ryde — $678,719 (-$36,181)
• Caringbah — $679,373 (-$38,053)
• Kirrawee — $671,313 (-$36,015)

Rouse Hill has had the largest decrease in median value (-$88,146), with Kellyville ($71,882) and Hurstville (-$65,019) following closely behind. 

Melbourne

Melbourne suburbs that have reflected a decrease median value for units include: 

• Balaclava — $598,436 (-$19,856)
• Brunswick — $579,828 (-$28,319)
• Docklands — $575,517 (-$40,679)
• South Melbourne — $596,486 (-$49,438)
• St Kilda East — $579,514 (-$34,169)
• Thornbury — $584,288 (-$27,416)
• Ferntree Gully — $576,067 (-$24,372)
• Beaconsfield Upper — $573,562 (-$28,142)
• Clayton — $570,988 (-$65,579)
• Oakleigh — $575,210 (-$53,324)

Commenting on the findings, CoreLogic’s head of Australian research, Eliza Owen, noted: “Six of these [suburbs] include unit values in the Melbourne - Inner region, where median values have declined an average -$33,313 between the onset of the pandemic and January.

“This is because the Melbourne - Inner region has historically had particularly high exposure to housing demand from overseas migrants, such as international students, as well as people employed in tourism, hospitality and the arts. Both cohorts have been particularly affected by the pandemic. 

“The same trends may explain the decline of median unit values in South Brisbane, where inner-city Brisbane has also seen relatively high levels of overseas migration as a component of population growth,” she said.

Ms Owen concluded: “While the impacts of COVID-19 on some markets has seen a decline in values, upward pressure on prices may result from the resumption of interstate and international travel, as well as continued improvements in the Australian economy. 

“As more of the housing market is caught in a broad-based upswing, first home buyers could face more challenges getting into the market in the year ahead,” according to the data analyst.

[Related: RBA announces February cash rate decision]