Australians are facing tough new measures to stop the spread of Coronavirus, but healthy clearance rates in Melbourne (72%) and Sydney (74%) suggest the property market is yet to be impacted.
There were 1,066 auctions scheduled in Melbourne and 520 in Sydney on Saturday, but it’s unclear what the coming weekends will bring.
Property market conditions may start being affected by the economic fallout from the coronavirus. Picture: realestate.com.au
We’ll be closely monitoring search activity on realestate.com.au and clearance rates as the situation evolves.
Unstable conditions could lead to hesitance
The sharemarket provides a real time perspective on how skittish people are feeling at the moment, but it’s harder to see how the uncertainty and fear about Coronavirus is hitting property.
When conditions – politically, environmentally, socially, economically – are uncertain, people become far more hesitant to buy and sell property. What does COVID 19 mean for the property market?
Clearance rates and search activity on realestate.com.au will provide early indicators on how people are feeling and the eventual direction of the market.
Potential fallout rests on stimulus
The impact of Coronavirus on the property market will depend on how well we can stimulate the economy.
The cash rate was slashed once again this month, with one more cut expected in the coming months. The federal government has also announced budgetary measures to get us spending.
Keeping the economy on track will be key to sustaining property market. Picture: Getty.
If we can keep the economy in a relatively stable condition, the effects on property won’t be so bad. However, if we head towards a recession, conditions will deteriorate more rapidly.
For property, it’s important to monitor the unemployment rate as a rapid rise could lead to a surge in distressed listings and big price drops.
But for now, it’s still too early to tell which way the economy will go and what it means for property.
First home buyer hotspots
While Coronavirus is causing a lot of uncertainty, it is yet to affect first home buyer enquiry levels. It’s likely the additional rate cut, the 5% deposit scheme and various state government incentives are providing a decent boost to activity.
The suburbs and types of housing generating the highest levels of enquiry are dominated by units in Sydney and Melbourne. Melbourne CBD units topped the list, followed by Footscray and Parramatta.
Broadly, the west of both cities appears to be the preferred area for first home buyers, likely driven by relative affordability.
The most expensive suburb on the list is Randwick where the median price for a unit is almost $940,000. This is almost double the median price for a unit in Melbourne’s CBD.
Nerida Conisbee
