The coronavirus outbreak is making the outlook for prices uncertain, says a report

The COVID-19 outbreak is expected to moderate sales activity in the market, but one question remains — will it dampen house prices?

According to the latest market analysis from CoreLogic, house prices across capital cities still rose by 0.7% in March.

Tim Lawless, head of research at CoreLogic, said growth moderated over the second half of the month due to the impacts of the coronavirus outbreak on consumer confidence and the social distancing policies that took place.

In fact, the reading for the month emerged as the lowest monthly gain since the market recovered in July last year.

"Although Australia's housing markets have begun to enter a period of disruption, they are coming from strong foundations," Lawless said.

On a monthly basis, Darwin recorded the highest price growth at 2%, followed by Sydney's 1.1%. Only Hobart reported a decline in house values at 0.2%.

The infographic below shows the median value of homes in each capital city:

House prices grew in March but the second half of the month was influenced by the impacts of the COVID-19 outbreak.

Lawless said the housing market has entered an uncertain period. While it is expected that sales activity will slow down, Lawless said the changes in prices will ultimately depend on the economic consequences arising from the outbreak.

"Considering the temporary nature of this crisis, along with unprecedented levels of government stimulus, leniency from lenders for distressed borrowers and record low interest rates, housing values are likely to more be insulated than sales activity," he said.

Collections: