Four years after the World Health Organization (WHO) declared COVID-19 a global pandemic, Tim Lawless (pictured above), executive research director for Asia-Pacific at CoreLogic, has outlined seven significant ways the crisis has transformed housing trends.
From surging home values to tightening rental markets and the influence of monetary policy, the landscape of housing has undergone profound changes.
“CoreLogic's national Home Value Index (HVI) surged 32.5% between March 2020 and February 2024, adding approximately $188,000 to the median value of an Australian dwelling,” Lawless said.
Despite market cycles influenced by policy, interest rates, and demographic shifts, housing values have shown remarkable resilience and growth.
With vacancy rates around 1% and rental growth skyrocketing, the national median dwelling rent has increased by roughly $150/week since March 2020, highlighting the substantial tightening of rental markets.
Lawless said that monetary policy has been pivotal in stimulating housing demand and tempering activity as interest rates began to climb from mid-2022.
The phenomenon of a fixed-rate cliff was a concern, yet borrowers have adapted well to the higher mortgage rates, maintaining arrears below pre-pandemic levels.
The pandemic period saw a surge in inflation, driven by fiscal stimulus, low interest rates, and global supply chain disruptions.
“Inflation is now beating forecasts, fuelling speculation we could see rate cuts later this year,” Lawless said.
Post-lockdown, the labour market tightened significantly, although it is beginning to loosen. Yet, RBA forecasts suggested unemployment rates will stay below 4.5% until at least mid-2026.
Demographic shifts have also played a crucial role.
“Housing demand remained strong through the pandemic despite closed borders due to a diminishment in household size,” Lawless said. “Internal migration trends favoured regional markets through the pandemic but have since largely normalised, and open international borders saw overseas migration spike to record highs.”
Despite soaring housing demand, the expected increase in housing supply has not materialised. Lawless highlighted the challenges of supply chain constraints, labour shortages, and rising construction costs that have kept dwelling completions flat throughout the pandemic.
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