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There has been varying reports on the residential property market in the wake of COVID-19.
The AFR reported that the federal government’s economic rescue package will protect residential house prices for the next six months. AMP Capital economists have stated that whilst high unemployment puts the property market at risk, loan repayment holidays will assist people in avoiding the forced-selling of their properties. (Housing markets to dodge crash, but long-term fears loom – Nila Sweeney, 15/04/20)
In contrast, the AFR also reported that real estate agents expect prices to drop 20%. Over the next six months, buyers are expected to avoid the market, in part, due to plummeting consumer confidence. CoreLogic’s RP Data has revealed that 35% of agents expect a 10-20% drop, and 27% of agents expect a steeper decline of more than 20%. It is believed that the market has already experienced a huge drop in prices. (Real estate agents expect prices to drop 20pc – Nila Sweeney, 14/04/20)
The Age has reported that Commonwealth Bank expect prices to fall by 10% in the next six months in Sydney and Melbourne. CBA forecast is due to a variety of factors; contractions in lending, low buyer expectations, falling rents and auction clearance rates all result in a lower-than-usual turnover of housing stock. (Sydney, Melbourne house prices facing 10 per cent fall: CBA – Shane Wright, 17/04/20)
UBS has also provided its prediction. Read it on The Urban Developer: Stimulus Not Enough to Offset House Price Falls: UBS.
Auction clearance rates are also adding to this predominantly-pessimistic 2020 outlook. The Real Estate Conversation explores this in ‘Preliminary auction clearance rate of 29.3 per cent’.
In response, Victoria has lifted a ban on open-for-inspections in occupied homes. The AFR reported that the Real Estate Institute of Victoria lobbied for the retraction of the rule merely 4 days after its announcement. (Victoria backtracks on open inspection curbs – Michael Bleby, 13/04/20)
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