The Melbourne property market will slump for another 12 months as job losses and nervousness drags down rents and sales prices despite some states starting to allow auctions and open homes.
Cautious investors facing a swamped rental market are also unlikely to see a reprieve, with leading housing academics and economists warning a lack of immigration will dampen the market and reduce demand for homes.
University of Melbourne Professor of Property Piyush Tiwari warned it would take “some time” to get the major capital city property markets back to where they were in early 2020 with tourist hotspots to take even longer.
“The reasons are not only related to being able to inspect properties or attend auctions but also to the economy in general,” Dr Tiwari said.
“Unemployment rates have risen, lending risk has increased and there is some credit tightening in the market. The global economy, travel bans and possible restrictions on immigration would also be a dampener.”
Prices have not fallen dramatically because sales activity is low, but he suspects the slump in activity will continue for six to 12 months at least. NAB is predicting Melbourne apartment prices will fall 10 per cent this year.
Reduced population growth … will also constrain demand. This is especially the case in Sydney and Melbourne.
Felicity Emmett, ANZ
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