Half of Aussies expect property prices to fall

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.

Leith van Onselen
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Comments

  1. 500,000 borrowers have deferred $192 billion worth of mortgages (comprising 11% of housing loans).

    On RN the other day the updated numbers were 900k borrowers for 250B of mortgages.

  2. DominicMEMBER

    20% of people expected prices to rise … that’s a lot of people.

    Was at the cafe earlier to grab a sandwich and heard two Boomers discussing their IPs: spent money on this … adding value here … think it will be a great investment etc. There’s never a machine-g#n handy when you want one. Ever noticed that?

  3. No change ! Was the question: Do you have any change?

    I mean a n change response is more amazing than a + 15% response.

  4. “Half of Aussies expect property to fall”

    “Half of catholics question whether there is a god”

    I’m not sure which statement I expected to read first!!