Are you looking to buy a new home or investment property?
Well I know many strategic property investors are.
And homebuyers keen to take advantage of the market opportunities are also actively in the market.
But according to research from ANZ Bank most buyers and sellers have gone on strike
Of course things were different only a few weeks ago...
The latest Corelogic figures showed that over the month of March, housing values rose across every capital city apart from Hobart (which declined -0.2%), while over the March quarter, every capital city recorded a rise in housing values.
House prices also grew strongly through the second half of last year and in March were up 10% from the low in June 2019.
But now shutting down of auctions and public open homes is very likely to put an end to that strong growth.
In a recent report ANZ Bank suggest that because of these measures, many potential buyers and sellers will simply withdraw from the market until the virus is under control and social distancing measures are eased.
As buyers and sellers dry up, ANZ think properties that do trade through this shut-down period will see price falls with only some sellers willing to enter such an uncertain market.
The ANZ Housing Search Index (HSI), which combines internet search numbers for house-buying related terms, fell sharply in March.
This suggests we should see house price growth start to slow in coming months.
Specifically the HSI suggests annual house price growth will turn over by June (Figure below).
This effectively indicates a fall in the level of house prices as early as this month.
That would be consistent with the flattening out in daily house prices, as well as the downturn in house price expectations.
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Once the social distancing measures are removed, ANZ think it is unlikely prices will simply bounce back.
Despite enormous fiscal support, unemployment is still expected to rise sharply through this period and is unlikely to fully recover for some years.
This, with a possible reassessment of debt appetite, will likely result in a slow recovery for house prices.
Now is the time to take action and set yourself for the opportunities that will present themselves as the market moves on.
If you're wondering what will happen to property in 2020–2021 you are not alone.
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