Only a fortnight ago, CoreLogic published the below chart showing that Australian property sales had bounced back from the “worst ever” collapse, with capital city sales running 9.1% above last years levels, driven by a massive increase in Sydney (+20.7%):
Now, with Australia heading into lock down, Australians facing mass unemployment, and auctions and open for inspections cancelled, it is forecast that property sales could collapse by 50%:
Jobs ads have also gone “off a cliff”, as thousands of Australians get sacked and companies face financial ruin due to the coronavirus pandemic smashing the economy.
New social-distancing rules banning auctions and open house inspections from Friday come with major shutdowns of the hospitality and retail industries, taking prospective home-buyers out of the market.
CoreLogic’s head of research, Tim Lawless, said the ban, on top of the collapse in employment across the country, would contribute to a 50 per cent drop in transactions over coming months.
He said it would be a much bigger impact than previous shocks to the market including the 25 per cent fall during the global financial crisis.
“Buying property and selling property requires a big commitment and confidence and that’s just disappearing,” he said.
Alongside falling prices, this would obviously deal a hammer blow to state government budgets, which are highly reliant on stamp duty receipts.
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