A month after trimming his forecast for Australian dwelling value declines to between 5% and 10%, AMP chief economist Shane Oliver has turned bearish owing to the spike in COVID-19 infections across Melbourne:
Dr Oliver said the uptick in virus cases in Melbourne would further weaken the market and add downward pressure to housing prices.
“I thought a month ago we’ve managed to get the virus under control, which might have removed some of the downside risks, but the new virus outbreak has reopened those risks”…
“The lockdown poses a renewed threat to the economy, which ultimately is a negative for the property market.
“I was looking for around 10 per cent price drops in Melbourne and Sydney. With the virus outbreak, the risk of a 20 per cent house price fall has emerged again.
“The market is in a pretty precarious situation at the moment.”
For those of you that may have missed it, the MB team discussed the risks facing the Australian housing market in last Thursday’s podcast with our partners at Nucleus Wealth:
- Coronavirus a unique challenge to Australian property and growth model as a whole
- Mass immigration and international students
- Foreign buyers’ role in Australian property
- Rental crash
- 1.3 million loss making landlords
- Policy exhaustion and options