We now have official data right up to the point where the virus hit. What does it tell us?
There’s a lot of shoulda-woulda-coulda’s about this crisis.
If only China hadn’t persecuted that whistle-blower doctor. If only it hadn’t gone global. If only Australia had raised the drawbridge over our massive moat earlier.
And can you imagine where the property market would be at right now if the Corona Crisis had never happened?
Because the official data now runs right up to the point where the crisis hit. We know we exactly where the property market was at at precisely the moment the crisis brought everything to a halt.
And where was it at?
On a tear-away.
Look at the national picture. We’ve got ABS new mortgage data and Corelogic’s dwelling values index. The picture is pure bullishness.
We were well on our way to price growth of more than 10% per annum. Another month or two and we would have been there.
What’s more, we were moving into a period or rare capital-city coordination. The national picture was driven by Sydney and Melbourne, but Brisbane was also posting decent growth, Adelaide was up, and even Perth was improving.
(You’ve got to feel for Perth, don’t you? Just as the green shoot of recovery were emerging, they were mowed down by the Corona Virus.)
Anyway, this is what the city-by-city picture looks like.
There’s Sydney, where prices were already growing more than 12%:
Then Melbourne, where prices were growing at a similar clip, but where the finance data was pointing to even stronger growth in the months ahead:
In Brisbane, prices were growing at 4%, with plenty of upside:
Adelaide maintains its reputation as the capital of boring, but growth was improving:
And in Perth, the finance data was clearly suggesting that price growth would return to positive territory in the near term:
If only the Corona Virus hadn’t struck, the property market would be booming and we’d all be knee deep in money.
Cruel, cruel fate.
But this is not just about nostalgia and bitter-sweet regret.
This data is important because this is the last read we had on ‘normal’. It’s the last ‘clean’ data.
That is, this is the last picture we have of the property market before the impact of the corona virus overtook the impact of fundamentals.
And in that sense, with the boom cut short in its prime, it helps us remember just how solid the fundamentals were.
Now obviously those fundamentals are on ice right now. But after the virus is over, they’ll come back.
And as far as the fundamentals are concerned, this boom is unfinished business
That’s why I say I don’t know how long this downturn will last, but I do expect the recovery to be sharp.