Foreign Property News | Posted by Shwe Zin Win
An almost $100,000 hit has been forecast for Melbourne home prices, with forced sales flagged as a potential outcome of the city’s second COVID-19 lockdown.
NAB’s latest Residential Property Survey tipped house and unit prices to plunge 7.3 per cent by the end of the year, with another 6.5 per cent decline expected in 2021.
The combined 13.8 per cent predicted fall is the worst outlook assigned to an Australian capital by the major bank, and equates to about a $94,000 drop for a median-priced dwelling worth $683,529.
Melbourne home values have fallen 2.3 per cent over the past quarter, according to property data firm CoreLogic.
NAB Group chief economist Alan Oster said the bank’s forecast was compiled before Premier Daniel Andrews announced a six-week lockdown for metropolitan Melbourne and Mitchell Shire, reviving a ban on face-to-face auctions and open for inspections. But he stood by it.
“I suspect (the new lockdown) would make people feel even more nervous about what’s going to happen in Melbourne,” Mr Oster said.
“We worry about (coronavirus halting) population growth in Melbourne, the levels of unemployment, and what might happen to some businesses if the second lockdown knocks them over. Then people might have to sell, that’s the risk.”
Property commentators have generally held the view mortgage holidays, and the federal government’s JobSeeker and JobKeeper payments have prevented a rush of forced sales thus far.
CoreLogic research director Tim Lawless expected this would continue to be the case, tipping a “sharp drop” in property sales as a consequence of Melbourne’s new lockdown.
Mr Lawless said this would be caused by “both a material decline in new listings as vendors lose confidence in testing the market, and a lower number of sales as buyers retreat to the sidelines”.
But he said this outcome could have a silver lining by acting to “insulate home values from material declines” and generate “a level of pent-up demand which will see housing activity improve” once the six weeks had passed.
He noted agents were “arguably more prepared to switch towards an online selling environment” this time than they were when on-site and in-room auctions and open for inspections were first banned nationwide in late March.
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Remote auctions and inspections by appointment are still allowed in Victoria’s locked-down regions.
The NAB survey of 370 property authorities — including sales agents, property managers, developers, asset and fund managers, homeowners and investors — also identified rising unemployment and job uncertainty as the factors to have the biggest impact on the Victorian market.
Other concerns were falling consumer confidence, the potential end of JobKeeper and JobSeeker, the difficulty in accessing finance, and lower migration levels.
The latter was tipped to impact Victoria more than any other state.
Ref: Realestate.com
