How strong is the property market?
While there was an overall annual growth in residential house prices in the December quarter of 2019, the housing market was largely variable across different states and capital cities. In Melbourne and Sydney, the market has been robust for several years. However, this looks set to change in the coming months, with market uncertainty and declining consumer confidence beginning to develop, driven by the coronavirus pandemic. The prospect of an Australian recession has become more realistic and may lead to falling demand in housing. Supplementing this, face-to-face auctions were expected to drop drastically in numbers, with online auctioning becoming more prevalent. Property auction clearance rates in all cities will likely be affected by this in 2020.
In 2019, the combined number of new real estate listings in Australia’s capital cities was the lowest that it had been in 12 years. With even more buyer indecisiveness, the price of real estate may take a short-term hit. The impact of the ongoing pandemic has also seen a flood of short-term rentals in the long-term rental market. This may lead to a rise in rental vacancy rates in larger cities such as Sydney and Melbourne.