Coronavirus: Melbourne property rebound will be a major boost to economy

 

Buyers can prepare to bag a bargain as the property market recovers from COVID-19, but the opportunity may be short lived.

Despite doomsday predictions of house prices falling by up to 30 per cent, experts tip a 10 per cent drop from the pandemic is far more likely.

Real Estate Institute of Victoria president Leah Calnan said the sooner the industry got back to business, the faster house prices could rebound and the better it would be for the entire economy. Lifting the ban on auctions and open for inspections was a “great start”, she said.

“The Victorian property market is an enormous contributor, from residential sales to commercial buildings, short-stay accommodation and the private rental market,” Ms Calnan said.

“While these will all have their own starting times, returning to a sense of normality in all of them is really important.

“Property taxes also contribute to close to 48 per cent of the state government’s overall funding.”

Realestate.com.au chief economist Nerida Conisbee said there was still significant demand for “big family homes” despite coronavirus.

“The groups that are most impacted by COVID-19 are investors, both local and offshore. We have significant drop offs in inquiry from both,” Ms Conisbee said.

“Conversely, first-home buyers are very active … this is being driven by a number of state and federal incentives available to these buyers.”

She said it would be harder for some young buyers to get loan approval from banks, while others would forced to put their plans on hold after losing employment.

One in five Victorian adults living with their parents moved back home because of coronavirus, a Finder survey revealed this week.

Tenants Victoria chief executive Jennifer Beveridge said many young adults could face financial hardship well into the year, but higher vacancy rates could help make rent more affordable.

Full Circle Property Advocates director Rob German said the market could slightly weaken when government welfare arrangements such as JobKeeper and JobSeeker ended, and the moratorium on evictions was lifted.

But prices were unlikely to drop more than 10 per cent and there could be some “good investment opportunities” and value for those in a position to buy, he said.

He added that self-funded retirees may put their plans to downsize on hold after losing rental income during the crisis.

Stamp duty reforms were more important than ever, as the government looked for ways to stimulate the economy, Upside Realty chief executive Adam Rigby said.

“Seniors keep delaying a downsize because they are unsure about the market and they know they will be slugged with a huge tax when they make the move,” Mr Rigby said.

Source : news.com.au