PHOTO: While some banks have revised their outlooks, those of other banks have remained unchanged. Photo: Natasha Rae
Property markets around Australia are yet to see the full scale of the coronavirus crisis’ impact on prices, according to economists, as stimulus measures soften the blow.
In the early days of the COVID-19 pandemic’s arrival, initial forecasts for property price drops ranged from 10 per cent to 15 per cent.
Five months on and most believe prices are running their course as first forecast but some banks have revised their predictions up for smaller cities and down for major centres, notably pandemic-hit Melbourne.
House prices fell just 2 per cent nationally in the June quarter, with a 2 per cent drop in Sydney and 3.5 per cent in Melbourne, the Domain House Price Report found.
The drops have so far been cushioned by federal government stimulus payments and mortgage holidays on offer from lenders.
ANZ Bank has maintained its forecast for national house prices to fall by 10 per cent from peak to trough but now expects smaller falls in property price dropsand Canberra.
While all those cities are set to fall between 6 and 9 per cent, the bank revised its forecast to a 15 per cent drop in Melbourne house prices, a dip greater than its previous prediction of a 13 per cent fall.
It still predicts a 13 per cent fall in Sydney, bottoming out in the second half of 2021.
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