Victorian real estate weathers the coronavirus storm
Real Estate Institute of Victoria President Leah Calnan says Victoria’s property market seems to be holding its ground well during the COVID-19 pandemic, according to the latest REIV Residential Market Index (RMX) figures.
The RMX is a residential property price index (RPPI) designed to provide an up to date and simple insight into real property price trends in Victoria.
A RPPI measures the price change of the stock of residential dwellings over time.
In mid-March, the price index was heading into possible new record levels, based on the prices recorded a couple of weeks before the restrictions came into effect.
The RMX has been gradually declining since late March due to the coronavirus outbreak, which saw significant restrictions enforced on real estate.
Although, for now, residential prices in Victoria are still stronger than the same period last year.
“Victorian property prices have held firm during COVID-19; prices are higher than they were 12 months ago,” Ms Calnan said.
“There are many predictions circling about real estate and the economy in general, but looking at what the actual data tells us, the Victorian market is weathering the storm well.
“At this time, prices are not as affected by the coronavirus pandemic compared to sales volume, which remains much lower than expected at this time of year.”
The RMX considers all properties (not just the ones sold) and gives weekly insight into real price movement over time, a more accurate and up to date reflection on current price trends.
The current RMX reference period is 2016, equivalent to 100.0. This aligns property prices with the most recent ABS census data at the time of release.
This means the property price-weighted average in 2016 was given a value of 100.0, and price movements over time are relative to this ‘base’ reference period.
The current RMX value of 125.4 means that on average, properties in Victoria today are worth 25.4 per cent more than they were in 2016.
In the week ending May 17, 2020, the RMX had a week-on-week increase of 0.9 per cent, which broke the declining streak seen in the previous eight weeks.
“The Victorian market continues to show strong resilience, with the return of public auctions and easing of some restrictions, we expect the market to soon start gaining the momentum it lost due to the pandemic.”