House Prices Have Started To Fall Across Australia Due To The Coronavirus
House prices have started to fall in several states across Australia due to the coronavirus.
Predictions about how low they will go range from a five to 50 per cent drop, however it's tough to zero in on how the property market will perform in each jurisdiction over the coming months.
The number of available buyers has plummeted during the pandemic, with thousands of people out of work or had pay reduce, leaving them unable to secure loans; and many more overseas investors now can't get into the country due to our borders being shut.
Not to mention how most auctions and open house inspections have been canceled or put onto the virtual sphere to ensure social distancing.
The market in Tasmania has already been stung, with a 14 per cent drop noted in Hobart.
The Real Estate Institute president Mandy Welling said: "These are the least productive figures since July 2013. Not since the recession back in the late 80s, I couldn't find evidence of anything that has been this significant."
Melbourne and Perth have also witnessed falls in property sales and prices, however they're not nearly as bad as Australia's most southern state.
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Finance expert Stephen Koukoulas wrote for Yahoo Australia, saying: "From the recent peak levels earlier in the year, Melbourne prices are down less than 1 per cent and Perth prices, which were showing signs of life, has dropped a tiny 0.1 per cent."
Corelogic data predicts properties in Sydney A-grade homes will fall between 5-10 per cent over the coming months, B-grade homes could drop as much as 15 per cent, while C-grade properties might not sell at all.
Smart Company's Michael Yardney said: "This is a great time for cashed-up investors and homebuyers planning to upgrade to buy a property considerably cheaper than they would have had to pay a few months ago, and for considerably less than they will have to pay this time next year."
Figures show the Sydney property market has remained strong through the early stages of the pandemic, however the true impact of Covid-19 might take a bit more time to hit.
If you listen to financial commentator and US author Harry Dent, the fall in property prices in Sydney and Melbourne could be dramatic.
He told Digital Finance Analytics Principal: "It's the crash of a lifetime. And conversely, if you play it right, it's the investment or the sale of financial assets of a lifetime."
"I think it's going to be 30 to 50 [per cent in Sydney and Melbourne]. That'll probably be the biggest shock Australia's had.
"It's going to be good for your country and extra good for your children and grandchildren that real estate comes down to maybe just four or five times income - instead of eight, 10, 11, 12 - when really three is more normal.
It could be a very good time for people who have wanted to break into the property market. Interest rates are at record lows and in some places there is a much higher supply outstripping demand.
Featured Image Credit: PA