According to the latest ANZ report, the economic impact of the COVID-19 epidemic will likely derail the dynamics of the housing market this year.
ANZ forecasts lower prices in capitals, with substantial decreases expected for Sydney and Melbourne. On average, the decline from peak to trough should reach 10% in capitals.
Prices in Sydney, Melbourne and Hobart are expected to drop 13% until mid-2021. Brisbane, Darwin, Adelaide and Canberra are also on the verge of further price reductions. about 5% to 7%.
Of all the markets, Perth should be the least affected, as prices in the city are expected to drop only 2%.
Felicity Emmett, senior economist at ANZ, said prices are likely to bottom out in mid-2021, but recovery will be gradual, as the unemployment rate could stay above 7% until in 2020.
"Already, almost a third of Australian households have reported a deterioration in their finances due to the pandemic. But this does not account for the extent of the loss of income, households of the whole of income and the industry undergoing reductions in hours and wages, "she said.
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Emmett estimated that unemployment would reach almost 10% due to the economic shocks due to COVID-19. It is the highest unemployment rate since the recession of the early 1990s.
"This collapse in income will create significant uncertainty for households and leave many people reluctant to commit to buying a house," she said.
Michael Yardney, director of Metropole Property Strategists, said that even if there was a possible price drop, not all markets would be affected equally.
In a feature article in Property Update, Yardney said that investment grade and category A homes could drop in value by about 5%. Class C properties will be hit the hardest, as there will be a leak to quality.
"But it will be on very low levels of transactions and the pace of recovery from this point will depend on the state of the economy as a whole," he said.
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Whyalla
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