Some ASX shares are down after CoreLogic reported that house prices dropped in June 2020. The decline accelerated compared to May 2020.
What did house prices do in June 2020?
Looking at the biggest cities in Australia for June 2020, Sydney dropped 0.8%, Melbourne dropped 1.1%, Brisbane dropped 0.4%, Perth fell 1.1% and Adelaide declined 0.2%.
It wasn’t bad news across the entire country though. Hobart prices rose 0.3%, Darwin prices went up 0.3% and Canberra prices grew 0.1%.
CoreLogic head of research, Tim Lawless, said “The downwards pressure on home values has remained mild to-date, with capital city dwelling values falling a cumulative 1.3% over the past two months. A variety of factors have helped to protect home values from more significant declines, including persistently low advertised stock levels and significant government stimulus. Additionally, low interest rates and forbearance policies from lenders have helped to keep urgent sales off the market, providing further insulation to housing values.”
What does this mean for ASX shares?
Shares are a bit mixed this morning. At the time of writing Westpac (ASX: WBC) shares are up 1%, CBA (ASX: CBA) shares are down 0.2%, the NAB (ASX: NAB) share price is up 0.8% and ANZ (ASX: ANZ) shares are up 0.4%.
Looking at property shares, REA Group (ASX: REA) shares are up 0.1% but the Domain (ASX: DHG) share price is down 0.3%. The JB Hi-Fi (ASX: JBH) share price is up 1% and the Harvey Norman (ASX: HVN) share price is up 3.7%, but the Brickworks (ASX: BKW) share price is down 1%.
It’s good to see that national house prices aren’t falling by 1% a month or more. However, there are concerns that the economy could face more pain once jobkeeper, business support and other measures finish. I think investors need to remain cautious, but keep thinking positively about the long term beyond COVID-19.
Disclosure: At the time of writing, Jaz doesn’t own shares in any of the businesses mentioned.