property market

Renters bail out and sales plummet as coronavirus hits property market

PHOTO: Renters bailing out, landlords offering free rent, sales values dropping – Covid-19 has had dire effects on the housing market, but it looks as though it could be about to turn around. Photograph: James Ross/AAP

The coronavirus crisis is having a devastating impact on the Australian property market, with sales down by hundreds of millions of dollars and tenants handing back the keys because they can no longer afford their rent.

Sales values have dropped 85% in Melbourne in the past eight weeks, according to figures released on Tuesday, equating to a loss of $584m compared with the same period last year. In Sydney, sales were down 79% (a loss of $454m), a data dashboard compiled by FrontierSI/UNSW showed.

Westpac gave a gloomy outlook on Tuesday when it announced a $1.6bn hit to its balance sheet from the virus as customers struggled to meet their loan repayments. It followed NAB’s worst-case prediction of a 32% fall in prices in the next two years.

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The Frontier/UNSW figures, which are derived from publicly available sources such as Domain and realestate.com, chime with a similarly drastic picture in the big city rental market as coronavirus continues to wreak havoc on the economy.NSW rent relief laws must address power imbalance between owners and tenants, union saysRead more

Across all capital cities rental asking prices fell 3.1% in the past week and 2.5% in the past month, according to SQM research. In Sydney rents were off 3.8% in the past week and 5.2% in the past month, while Melbourne was down 2.5% and 2.6% respectively. But they mask huge falls in the plusher areas such as Sydney’s eastern suburbs, where house rents are down 10%, and the CBD, where they are off by 17%.

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