Economists predict property prices will still fall 10 to 15 per cent as poor consumer confidence and employment figures come in.
The latest figures from ANZ-Roy Morgan show confidence fell for the third week in a row with deteriorating conditions in Melbourne the “most likely primary contributor to the turn in sentiment”.
This was cemented by the Australian Bureau of Statistics weekly figures which showed total payroll jobs at the end of June were still 5.7 per cent below mid-March.
ANZ head of Australian economics David Plank said the biggest fall was seen in "current economic" conditions, which were down around 15 per cent; and fiscal support for residents would be vital in the months to come.
“In contrast, sentiment toward personal finances is close to unchanged, highlighting the role that the massive fiscal stimulus has played in shielding people from the direct fall-out of the economic slump triggered by the health response to the pandemic,” Plank said.
Sentiment in housing markets also collapsed in recent months according to the NAB quarterly Australian residential property survey.
There was a sharp downturn for all states particularly NSW and Victoria, and the biggest impact going forward would be rising unemployment and consumer confidence in general.
Dwelling price forecast
|Cap City Avg||-6.1%||3.0%||-4.6%||-4.3%|
^Source: CoreLogic, NAB Economics
NAB group chief economist Alan Oster said they still expected to see falls in property prices of around 10-15 per cent over the next year or so.
“While prices have held up slightly better than expected, they have now declined for two consecutive months across the capitals and we expect this to continue for some time yet,” Oster said.
“This easing in prices in Sydney and Melbourne comes after a very strong period in growth from mid-2019 where prices troughed.
“While the initial Covid-19 related restrictions on housing activity have eased, the economy has undergone a very large contraction, and while we appear to have passed the trough in activity, it will take time for the recovery to unfold.”
The survey also showed new and established markets were being bolstered by owner occupiers and foreign investors during the second quarter.