PHOTO: Property Crash
Australians looking for hints on where property values will go next should keep an eye on Mandurah’s performance, a property analysis has said, while flagging value falls of more than 40 per cent.
Digital Finance Analytics principle and housing expert Martin North said the Western Australian city of Mandurah is a “canary in the coal mine” for Australia’s housing performance during the Covid-19 downturn. North conducts monthly analysis of housing stress across the country, and believes the pandemic crisis will trigger large scale value falls of more than 40 per cent.
“Not every property, not every city and not every suburb will see the same thing, but typically the starting point here is that our property in Australia in absolute terms is more than 40 per cent overvalued relative to long-term norms,” North said.
“We’re over-leveraged and we’re over-priced, so prices will come back. It could be as much as 40 per cent or more in some places where all of the fundamental supports of price growth have gone away.”
North identified those as population growth or migration driving demand and strong employment figures.
“I come back to Mandurah in Western Australia, where I’ve been watching mortgage stress rise over the last four or five years… Mandurah has seen a 38 per cent fall in home prices from their previous peak, they’ve seen more than 20 per cent of households in negative equity,” North said.
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