Budget Direct has released research into consumers’ confidence towards the property market in the wake of COVID-19.
Over half (56.7%) of those surveyed predicted that property prices would fall over the next 3–6 months. Of these, the vast majority (43.3%) anticipated an average fall of 20% or less, whereas a smaller share (13.4%) expected price falls of over 20%.
By comparison, nearly 20% of those surveyed expected property prices to rise.
The results are fairly even across jurisdiction. For example, 54.1% of those surveyed in NSW expected property prices to fall versus 55.7% in Victoria:
MB is fairly bearish on Australian property owing to the barrage of headwinds facing the market, These include:
- High unemployment, falling household incomes.
- Collapsing immigration and rising supply.
- Mortgage repayment holidays and income support ending.
- ~500,000 borrowers have deferred $192 billion worth of mortgages (comprising 11% of housing loans).
- Tightening credit availability (despite falling rates).
The big risk is that these drive a significant number of forced sales leading to a feedback loop driving prices down further.