Coronavirus worries speed property price falls

Melbourne lockdowns are set to further dent property confidence after price declines there and in Sydney picked up pace in July.

Auctioneer James Keenan in action in Sydney. Picture: Darren Leigh Roberts

Residential housing prices in Melbourne may tumble 20 per cent as stage-four restrictions trigger uncertainty and falls to consumer confidence.

Prices in Melbourne fell for the fourth consecutive month, picking up pace in July to 1.2 per cent, according to property researcher CoreLogic.

There was confusion on Monday evening about what stage-four lockdown would mean for market operations, which were allowed to continue through online auctions and one-on-one open homes under stage-three rules.

Real Estate Institute of Victoria president Leah Calnan told The Australian she had not been informed of a further clampdown but noted that government documents stated on-site work for property operators and real estate services was to close.

Economists fear the upgrading in severity and uncertainty could be another blow to consumer confidence and flow into housing market activity as buyers and sellers hold out.

“There is a pretty close relationship with COVID cases that has spread more rapidly and property price declines. These markets (Sydney and Melbourne) have also had a higher level of exposure to reduce migration from border closures,” Mr Lawless said.

“The movement to stage-four restrictions is clearly a massive downside risk and you have to expect there will be disruption in the market.”

Prices fell 0.6 per cent nationally last month, linked to resilience in the smaller and regional markets.

AMP chief economist Shane Oliver said Melbourne would likely emerge as the hardest-hit market, with accumulating economic pressures potentially leading prices to dive 15 to 20 per cent.

The market weakness will be most noticeable once financial supports for homeowners are ­removed.

“JobKeeper, increased JobSeeker, bank payment holidays and other support measures have helped head off a sharp collapse in prices but the market has still weakened and we expect an acceleration in falls as support measures start to be tapered from the December quarter,” Mr Oliver said

 

Ms Calnan said the REIV is working with the government to fine-tune the practical details of the lockdown framework.

“There is limited information and the industry is frustrated. We understand the necessity of the lockdown but want clarity,” she said.

Ray White’s Victorian chief executive, Stephen Dullens, said educating buyers and sellers about lockdown practicalities would be the biggest barrier to getting new listings and converting sales.

Sydney price declines also accelerated last month to record a 0.9 per cent fall. Smaller signs of weakness were seen in Perth (0.6 per cent), Brisbane (0.4 per cent), Hobart (0.2 per cent) and Darwin (0.3 per cent). Increases were recorded in Canberra (up 0.6 per cent) and Adelaide (0.1 per cent).