Tags :CoronavirusEconomicsEconomyhousingPROPERTYReal estate
Top economists predict that Australia’s house price will see a slight decline in COVID-19, before rising by 15% over two years.
In a forecast bulletin Bill Evans, Westpac’s Chief Economist and Matthew Hassan (Senior Economist), stated that most losses in the property markets between April and Juni next years will be consolidated through the property market.
Market growth is expected to accelerate following that, with an estimated 15% increase.
Both Mr Evans, Mr Hassan and Mr Hassan said that they expect most capitals to be resilient to the pandemic. Sydney (dropping 12%), and Melbourne (dropping 5%) will be the hardest hit.
“We now expect many capital city markets to be more resilient with a national fall of 5 per cent between April and June next year, distributed between: Melbourne (–12 per cent); Sydney (–5 per cent); Brisbane (–2 per cent); Perth (flat); and Adelaide (2 per cent),” the economists wrote.
“Of great importance, we are far more optimistic about price rise over the next 2 years with an estimated increase of around 15%.”
According to the pair, lower interest rate, mild recessions, and loan repayment holidays can all serve as price superchargers to increase property prices in growth markets while protecting current values in areas such as Melbourne.
Both Mr Evans and Mr Hassan think that the property markets will react to the pandemic through four phases.
The first shock is when prices fall. Both economists agreed the majority of property prices drops, except for Melbourne, had already happened.
The second phase is to stabilize the capital city markets between the March 2021 quarters and the December 2020 quarters.
The third phase will see a slight decline in prices until September 2021. The fourth stage will follow with two-year growth.
“The fourth phase will span at least two years when distressed loans from deferrals have worked through the system – and prices react strongly to ongoing low rates; improved affordability; a strengthening economic recovery and policy stimulus,” the economists write.
“Dwelling prices are expected to lift by 15 per cent over this two–year period.”
Australia’s August 2020 Property Prices*
|City:||Quarterly changes||Median Value|
|Sydney||– 2.1 per cent||$860,182|
|Melbourne||– 3.5 per cent||$667,520|
|Brisbane||– 0.9 per cent||$503,128|
|Adelaide||– 0.1 per cent||$444,021|
|Perth||– 1.6 per cent||$443,777|
|Hobart||+ 0.3 per cent||$490,743|
|Darwin||+ 1.0 per cent||$393,386|
|Canberra||+ 1.3 per cent||$636,324|
|National||– 1.7 per cent||$552,689|
*CoreLogic Data, median value includes homes and units
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