Sydney and Melbourne property prices could fall up to 30% due to coronavirus

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New research has painted a grim picture for the Australian property market’s future should the coronavirus pandemic worsen.

Data house SQM Research said a 30% decline in dwelling prices by the end of 2020 is entirely possible, with overvalued cities like Sydney and Melbourne the worst hit.

SQM Managing Director Louis Christopher said the best case scenarios for property owners and investors is that there are zero new COVID-19 cases by the end of April and as a result, measures such as bans on auctions and open houses are lifted.

“If we are able to get back to close to normal business by end of May (I certainly don’t think all restrictions will be lifted by that time), then I think confidence in the housing market is going to return,” Mr Christopher said.

“Assisted with all the stimulus announced and the economic damage relatively limited, it would mean a fall in housing prices recorded for the June quarter but a bounce back in the September and December quarters.”

But a worst-case scenario, where restrictions are lifted and a second wave of the virus occurs, would see a deep 30% correction in house prices, and restrictions stay in place for longer than six months, with more added.