According to the latest figures from
CoreLogic, national dwelling prices managed to hold up well in March, rising
0.7% over the month. The robust nature of the housing market also comes with
some lag-time, however, with results in April, May, and further down the road
likely to be more indicative of the current economic climate. According to
CoreLogic head of research Tim Lawless, we are entering into an
"unprecedented" period: "It's the sheer uncertainty of a
health-related crisis, rather than an economic one, or a financial catalyst,
that's the big difference here."
Coronavirus and the economic response to the pandemic could drag Australia's economy into a recession for the first time in almost 30 years. Business activity is already being affected, and house prices may very well plunge in the months ahead. Coronavirus has already hurt consumer confidence more than it did during the 2008 financial crisis, with recent listings and sales figures already showing a clear lack of movement. ;
According to data from SQM Research, listings that have been on the market between 30 and 60 days surged 74% in March compared to February. This is a strong suggestion that sales activity slowed over the month, with capital city markets already starting to feel the early pinch. According to SQM Research managing director Louis Christopher, “Residential property listings are starting to increase and accumulate... This may reflect the start of a capital city housing market downturn due to the health and economic impact of COVID-19.”
In Sydney, there were nearly 4000 homes on the market that met this criteria, up from around 1800 the month before. The discrepancy in listings was even more pronounced in Melbourne, with 30 to 60 day listings increasing from around 1200 in February to 5280 in March. The number of overall homes listed for sale also increased in March, up 3.7% nationally, 10.5% in Sydney, and 5.7% in Melbourne. Additionally, Brisbane listings rose by 3.9%, Perth by 8.5%, and Canberra by 11%.
Despite the bad news for some sellers, there is a very real likelihood of falling prices for buyers, along with resilient underlying conditions that may limit the downturn. Property expert Andrew Winter from Selling Houses Australia is already starting to see the bright side, saying that on the other side of this pandemic, "we’ll be so relieved to live in an amazing country, we may want to move to a different house, or rent a different house." While the speed of recovery will depend on the overall economy, the housing market may be fuelled by feelings of "We’re out the other side, let’s get going, let’s get on with it.”
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