PHOTO: CoreLogic Australia
CoreLogic has released its March Quarter Property Market & Economic Review, Eliza Owen Head of Research Australia provides insights around the state of housing before the onset of COVID-19 as well as an assessment of what is ahead.
There are some reasons to be optimistic about Australian property in 2020, but there are also key vulnerabilities in the economy as a whole, as well as variations across Australian dwelling markets to be considered.
Historic negative economic shocks have seen dwelling values relatively insulated. However, transaction activity has been more impacted.
The same phenomenon is currently playing out, as the combined capital cities markets have only just begun showing mild value falls of less than half a percent in the past month, while CoreLogic estimates suggest the number of sold properties declined around 40% over April.
The economic outlook for the Australian economy prior to COVID-19 was modestly positive.
Growth in housing market values was expected to extend over 2020, though it was anticipated that growth momentum would slow in the wake of affordability constraints, and higher levels of listings.
Amid the onset of COVID-19, and the resultant economic shutdown, the operating environment for the housing market has completely changed. On aggregate, the Australian housing market is now on the cusp of another downturn.
The most impactful restrictions on Australian real estate commenced between the 20th and 25th of March. These included the closure of Australian borders, a shut-down of non-essential services, a ban on open real estate inspections and on-site auctions, and limiting public gatherings to two people.
By mid-May, onsite auctions were reinstated in most states and territories, and property inspections are gradually opening up. But new housing demand is likely to see a continued decline, as borders remain closed to overseas migration, and unemployment rises.
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