{"id":6636,"date":"2020-04-21T11:33:06","date_gmt":"2020-04-21T01:33:06","guid":{"rendered":"https:\/\/www.abundancepropertygroup.com.au\/?p=6636"},"modified":"2020-04-21T11:33:06","modified_gmt":"2020-04-21T01:33:06","slug":"21-april-2020-daily-top-story-australian-house-prices-will-fall-by-10-in-just-six-months-according-to-commonwealth-bank-forecasts","status":"publish","type":"post","link":"http:\/\/www.abundancepropertygroup.com.au\/zh-hans\/2020\/04\/21\/21-april-2020-daily-top-story-australian-house-prices-will-fall-by-10-in-just-six-months-according-to-commonwealth-bank-forecasts\/","title":{"rendered":"21 April 2020 | Daily Top Story: Australian house prices will fall by 10% in just six months, according to Commonwealth Bank forecasts"},"content":{"rendered":"<div class=\"display-media image primary center\"><small><img loading=\"lazy\" class=\"alignnone size-full wp-image-6633\" src=\"https:\/\/www.abundancepropertygroup.com.au\/wp-content\/uploads\/2020\/04\/21.04.2020-Tuesday-3.jpg\" alt=\"\" width=\"540\" height=\"281\" srcset=\"http:\/\/www.abundancepropertygroup.com.au\/wp-content\/uploads\/2020\/04\/21.04.2020-Tuesday-3.jpg 540w, http:\/\/www.abundancepropertygroup.com.au\/wp-content\/uploads\/2020\/04\/21.04.2020-Tuesday-3-300x156.jpg 300w\" sizes=\"(max-width: 540px) 100vw, 540px\" \/><\/small><\/div>\n<div class=\"display-media image primary center\"><small>Australian house prices are set to dip amid the coronavirus.<\/small><\/div>\n<ul>\n<li><strong>The Commonwealth Bank has revised its property forecasts downwards, stating the coronavirus will have \u201cprofound short-term consequences\u201d for the market.<\/strong><\/li>\n<li><strong>Australia\u2019s largest bank expects prices to fall 10% nationally, with Sydney and Melbourne to be amongst the worst-affected.<\/strong><\/li>\n<li><strong>After the fall, its forecasts point to some stability returning to the market as interest rates remain at record lows.<\/strong><\/li>\n<\/ul>\n<hr \/>\n<p>Despite the hopes of the industry, property prices in Australia look like they\u2019re about to receive a hell of a haircut.<\/p>\n<p>Under revised forecasts the Commonwealth Bank, which holds the largest slice of Australian mortgages at $446 billion worth, now sees prices plunging 10% within six months, as the COVID-19 outbreak kneecaps economic activity.<\/p>\n<p>\u201cAustralian capital city dwelling prices, led by Sydney and Melbourne, have<a href=\"https:\/\/www.businessinsider.com.au\/australian-property-price-recovery-2020-forecasts-homebuyers-2020-2\" target=\"_blank\" rel=\"noopener\">\u00a0risen strongly over the past nine months<\/a>\u00a0but we expect that stellar run to end abruptly,\u201d CBA head of Australian economics Gareth Aird said in a note issued to Business Insider Australia.<\/p>\n<p>\u201cThe policy response to limit the spread of COVID-19 has created a plunge in economic activity and\u00a0<a href=\"https:\/\/www.businessinsider.com.au\/australian-unemployment-coronavirus-double-forecast-jobkeeper-2020-4\" target=\"_blank\" rel=\"noopener\">unemployment will spike<\/a>. This will have profound short term consequences for the housing market.\u201d<\/p>\n<div class=\"display-media image primary center\"><a class=\"cboxElement\" href=\"https:\/\/edge.alluremedia.com.au\/uploads\/businessinsider\/2020\/04\/CBA-charts.jpg\" rel=\"modal\"><img class=\"size_primary\" src=\"https:\/\/edge.alluremedia.com.au\/uploads\/businessinsider\/2020\/04\/CBA-charts.jpg\" alt=\"\" \/><\/a><\/div>\n<p>\u201cIt is our view that prices will fall sharply over the next six months.\u201d<\/p>\n<div id=\"taboola-mid-article-stream-thumbnails\" class=\" trc_related_container trc_spotlight_widget\"><\/div>\n<p>With live auctions and open houses banned in March, buying activity has slumped as\u00a0<a href=\"https:\/\/www.businessinsider.com.au\/australia-auctions-clearance-rates-sales-renters-coronavirus-2020-3\" target=\"_blank\" rel=\"noopener\">clearance rates plummet to all-time lows<\/a>\u00a0in its two biggest markets, Sydney and Melbourne. Exaceberated by significant uncertainty and weak economics, Aird says, means \u201cprice declines are inevitable\u201d.<\/p>\n<p>\u201cNew lending is expected to contract, buyer expectations have adjusted downwards from exuberance to pessimism,<a href=\"https:\/\/www.businessinsider.com.au\/australia-sydney-melbourne-falling-rents-suburbs-coronavirus-rental-market-airbnb-2020-4\" target=\"_blank\" rel=\"noopener\">\u00a0rents are likely to fall<\/a>, auction clearance rates are expected to remain weak and turnover will be lower than usual,\u201d Aird surmised. \u201cIn addition, the usual underlying demand pulse from net overseas migration has evaporated because the border is shut.\u201d<\/p>\n<p>\u201cThe extent to which prices fall will largely be determined by the magnitude of the lift in unemployment and the length of time that the government-imposed restrictions on day-to-day activity remain in play.\u201d<\/p>\n<p>Those variables are largely unknown right now. On Thursday Scott Morrison stated that there were\u00a0<a href=\"https:\/\/www.businessinsider.com.au\/scott-morrison-coronavirus-restrictions-2020-4\" target=\"_blank\" rel=\"noopener\">three conditions that would have to be met<\/a>\u00a0before restrictions were lifted, but that there were at least four more weeks to go before the possibility might be considered.<\/p>\n<p>While there may be a floor on the government lockdown, there doesn\u2019t yet appear to be a ceiling, with key legislation like\u00a0<a href=\"https:\/\/www.businessinsider.com.au\/coronavirus-wage-subsidy-2020-3\" target=\"_blank\" rel=\"noopener\">the government\u2019s Jobkeeper package<\/a>\u00a0passed with an initial duration of six months, although that too may be changed the Treasurer has flagged.<\/p>\n<p>In way of unemployment,<a href=\"https:\/\/www.businessinsider.com.au\/australian-unemployment-coronavirus-double-forecast-jobkeeper-2020-4\" target=\"_blank\" rel=\"noopener\">\u00a0early forecasts produced by Treasury and the major banks<\/a>\u00a0expect it to rise to around 10%. CBA\u2019s own internal data shows that the number of customers receiving Jobseeker payments has shot up, from a 2% annual increase at onset of March to around 20% just days later.<\/p>\n<p>Again, however, with accurate unemployment data not expected until the middle of May, the headline figure could easily be revised either way depending on how well the country can contain and then manage the virus.<\/p>\n<div class=\"display-media image primary center\"><a class=\"cboxElement\" href=\"https:\/\/edge.alluremedia.com.au\/uploads\/businessinsider\/2020\/04\/Price-forecasts.jpg\" rel=\"modal\"><img class=\"size_primary\" src=\"https:\/\/edge.alluremedia.com.au\/uploads\/businessinsider\/2020\/04\/Price-forecasts.jpg\" alt=\"\" \/><\/a><small>CBA\u2019s price forecasts per each capital city<\/small><\/div>\n<p>While the 10% average price fall is expected nationally, Aird suspects Sydney and Melbourne will be the cities leading the charge, falling 10% and 11% apiece.<\/p>\n<p>\u201cThe New South Wales and Victorian economies have more exposure to the most heavily impacted services sectors and less exposure to some of the more insulated sectors, [like] mining and agriculture,\u201d he said. \u201cIn addition, the Sydney and Melbourne housing markets are more reliant on strong population growth, particularly by immigration, to underpin demand.\u201d<\/p>\n<p>With Australia currently ranking as one of the countries\u00a0<a href=\"https:\/\/www.businessinsider.com.au\/australia-coronavirus-cases-active-estimates-modelling-2020-4\" target=\"_blank\" rel=\"noopener\">faring best against the virus<\/a>, it may be even longer before the country can reopen borders and kickstart immigration once more.<\/p>\n<p>Looking longer-term,\u00a0<a href=\"https:\/\/www.businessinsider.com.au\/interest-rates-are-expected-to-stay-at-0-25-for-the-next-3-years-at-least-as-australia-prepares-for-a-very-large-economic-contraction-2020-4\" target=\"_blank\" rel=\"noopener\">record low-interest rates\u00a0<\/a>and\u00a0<a href=\"https:\/\/www.businessinsider.com.au\/how-to-freeze-home-loan-repayments-australia-banks-coronavirus-mortgage-2020-3\" target=\"_blank\" rel=\"noopener\">mortgage freezes<\/a>\u00a0should help ease some of that price pain, and help put a floor under prices after six months, according to Aird.<\/p>\n<p>\u201cWe would then expect prices to stabilise before gradually rising as the unemployment rate begins to decline and restrictions on activity, including the housing market, are eased,\u201d he said. \u201cIt is possible that prices rise briskly in 2021 as was the case from mid-2019 given the incredibly low-interest rates.\u201d<\/p>\n<p>Until then, homeowners will just have to keep the faith.<\/p>\n<p>Source:\u00a0https:\/\/www.businessinsider.com.au\/australian-house-prices-property-market-coronavirus-sydney-melbourne-forecast-2020-4?fbclid=IwAR2iVXHu6fN7vQPcD8l24k4MFDI-QDYD9YiyO3ZS-ToeshfLFi8w3nR95wI<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Australian house prices are set to dip amid the coronav [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":6634,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_themeisle_gutenberg_block_has_review":false},"categories":[30],"tags":[],"_links":{"self":[{"href":"http:\/\/www.abundancepropertygroup.com.au\/zh-hans\/wp-json\/wp\/v2\/posts\/6636\/"}],"collection":[{"href":"http:\/\/www.abundancepropertygroup.com.au\/zh-hans\/wp-json\/wp\/v2\/posts\/"}],"about":[{"href":"http:\/\/www.abundancepropertygroup.com.au\/zh-hans\/wp-json\/wp\/v2\/types\/post\/"}],"author":[{"embeddable":true,"href":"http:\/\/www.abundancepropertygroup.com.au\/zh-hans\/wp-json\/wp\/v2\/users\/1\/"}],"replies":[{"embeddable":true,"href":"http:\/\/www.abundancepropertygroup.com.au\/zh-hans\/wp-json\/wp\/v2\/comments\/?post=6636"}],"version-history":[{"count":1,"href":"http:\/\/www.abundancepropertygroup.com.au\/zh-hans\/wp-json\/wp\/v2\/posts\/6636\/revisions\/"}],"predecessor-version":[{"id":6637,"href":"http:\/\/www.abundancepropertygroup.com.au\/zh-hans\/wp-json\/wp\/v2\/posts\/6636\/revisions\/6637\/"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/www.abundancepropertygroup.com.au\/zh-hans\/wp-json\/wp\/v2\/media\/6634\/"}],"wp:attachment":[{"href":"http:\/\/www.abundancepropertygroup.com.au\/zh-hans\/wp-json\/wp\/v2\/media\/?parent=6636"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.abundancepropertygroup.com.au\/zh-hans\/wp-json\/wp\/v2\/categories\/?post=6636"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.abundancepropertygroup.com.au\/zh-hans\/wp-json\/wp\/v2\/tags\/?post=6636"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}