S&P: Property risks “firmly down”

More amusing stuff from S&P:

A contracting economy in the short term, rising unemployment, and depressed consumer and business sentiment in the wake of the COVID-19 outbreak have increased the downside risks for property prices and consequently the financial system in Australia, S&P Global Ratings said today.

We consider that the closure of real estate auctions as announced by the Australian government should, by itself, have only a short-term impact on the property market transactions. Although it is difficult to be definitive in these rapidly changing operating conditions, we currently foresee a downturn in the property sector to be relatively short lived, consistent with our economic forecast that real GDP growth will rebound toward the end of this calendar year and over the summer. We estimate that the Australian banks should be able to absorb increased credit losses due to COVID-19 within their annual earnings.

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