Restrictions eased, markets rallied, and consumer confidence increased during May. Auction clearance rates to 24 May were 62.7%, the highest since week ending 15 March 20, almost back to pre-restriction levels. However according to Core Logic, stock volumes continue to remain significantly lower – 70% below the same week in 2019.
Economists have forecast a drop of between 11 and 32% in house prices over the next three years according to Commonwealth Bank, driven by the end of Government stimulus measures in September. For now, reduced stock levels, willing buyers and sellers transacting on property, and a lower than expected influx of distressed property sales are all preserving property values.
The Federal Government are working to lessen the impact on both the labour and housing market. Treasurer Frydenberg and Housing Minister Sukkar will unveil a residential housing construction rescue plan this week.
New home-buyer grants are tipped for all buyers. A “national construction initiative” is also slated. Plans for JobMaker, an initiative to create new employment opportunities is also in progress.
If successful, these measures could be significant in reducing any forecasted downturn in the housing market.
Download and read the full Market Essentials – June 2020 Report.