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.
“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.
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.
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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.