Powered by MOMENTUM MEDIA
subscribe to our newsletter

New interventions to hit housing turnover

New government-led interventions in the housing market in response to the coronavirus outbreak are set to further hinder transaction activity, according to Domain.

Over the past month, both state and federal governments have introduced a raft of new measures to address the ongoing threat posed by the coronavirus (COVID-19) outbreak.

In an effort to curb the spread of the virus, lawmakers have encouraged, and in some cases enforced, social distancing measures that have significantly altered business practices across all sectors of the economy.  

Among the government-led directives are bans on real-estate auctions and open-home inspections.

According to Domain economist Trent Wiltshire, these measures are likely to further dampen housing market activity, which had already showed signs of a slowdown, with auction clearance rates slipping below 60 per cent. 

Advertisement
Advertisement

“It’s clear that the market is slowing quite rapidly, that’s going to continue over the next few weeks,” he told Mortgage Business.

“The latest rules around no auctions occurring and open for inspections being limited to private inspections, no doubt we’re going to see the market slow further. 

“It’s harder to sell your house because of those restrictions and, secondly, buyer caution has definitely risen.”

He added: “People are concerned about their jobs; there’s a looming economic downturn coming up, so the number of people looking to buy a property is going to drop away quite a bit.”

Analysts are expecting the lull in activity to trigger a decline in residential property prices, with AMP Capital chief economist Shane Oliver forecasting a 15 per cent fall against a 10 per cent unemployment rate.

PROMOTED CONTENT


However, Mr Wiltshire expects the decline in housing turnover to outpace the fall in dwelling values.

“I think there’s going to be a bigger impact on turnover than prices,” he said.

“We’ve seen on Domain there’s been an increase in the number of new rental listings over the past couple of weeks so it’s going to be harder for landlords to find tenants.”

The government recently announced a six-month “moratorium” on residential and commercial tenant evictions to provide relief to distressed renters.

Mr Wiltshire said he does not expect these latest measures to significantly impact housing market activity, with landlords already unlikely to evict tenants with no confidence of replacing them.     

[Related: Housing market to see sharp rebound: La Trobe Financial]

New interventions to hit housing turnover
suburbs
mortgagebusiness

Charbel Kadib

Charbel Kadib is the news editor on the mortgages titles at Momentum Media.

Before joining the team in 2017, Charbel completed internships with public relations agency Fifty Acres, and the Department of Communications and the Arts.

You can email Charbel on: This email address is being protected from spambots. You need JavaScript enabled to view it.

Latest News

The non-bank lender has announced the launch of specialist interest-free finance option for renewable energy technology. ...

The ME Bank acquisition will widen Bank of Queensland’s customer base to more than 1 million, according to new data from Roy Morgan. ...

The “high end” of the property market in the capital cities has benefited the most from the recent housing upswing, jumping 2.7 per cent...

FROM THE WEB

Join a group of highly informed brokers.

Broker Pulse, a community-driven knowledge base of lender performance Reveal exactly which lenders are making life easiest for brokers and their clients by taking this monthly survey and joining a group of highly informed brokers who leverage these insights every month.

JOIN NOW
podcast

LATEST PODCAST: How the broking industry has evolved - and what's next for Aussie

Do you expect to see strong uptake of the HomeBuilder scheme?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.