Across the country property prices have fallen directly due to the transformed economy thanks to COVID-19, directly affecting people's lives, spending habits, and businesses trying to operate in the new usual. Five of the eight capital cities have witnessed a considerable slowdown in property clearance rates and like most other industries, the real estate sector is during a holding phase.
Many sellers do not see this as a buyer’s market right now, which is making many hold on to their properties instead of dispensing at lower prices. Others fear that rates may plummet as repayment holidays are about to come to an end and government stimulus winds back.
With everything, there are always two sides to all views, the first being the relative resiliency of the market, and second, those speculators predicting prices to fall by more than 30%. Looking at the data, the market has proven to be stronger than first predicted. One of the biggest factors responsible for this is the stimulus from the Government & industry, such as JobKeeper, JobSeeker, and repayment holidays by the government and financial institutions.
A followup federal government stimulus package for housing is expected to be announced soon and is expected to provide cash grants of at least $20,000 for buyers of newly constructed homes. A proven short term step in the past, these grants for new homes have supported the real estate sector and even helped in maintain a positive market sentiment, but many ask if is it enough for now.
A further perspective of the market is from a deeper analysis of long-term impacts in the industry. Some challenges that the sector will confront in upcoming months, stems from lower immigration, higher unemployment, economic slowdown, and lower confidence among buyers. All very dangerous territories.
If the economy has not picked up by the time the allowances and stimulus packages are withdrawn by the government, then there is a risk of considerable impact on the housing market with higher supply and lower demand of properties.
