Nearly six-in-10 experts say now is not a good time to buy a property, according to research from comparison site Finder, as the Reserve Bank of Australia (RBA) yesterday announced a hold on the cash rate for the second consecutive month.
According to experts and economists surveyed on how much they expected prices to dip by 2021, Hobart would see the largest drop of 10.5%, followed by Sydney at 10.2%.
Darwin and Melbourne had drops of 9.5% and 9.2% forecasted, with Brisbane, Perth and Adelaide all expected to see drops of around 8%, while Canberra would only see a 6.4% drop.
Graham Cooke, insights manager at Finder, said with increasing unemployment and growing economic uncertainty house prices would slide over the rest of the year.
“Both house-hunter and seller demand has weakened in the last month as Australians hunker down to help stop the spread of coronavirus,” Cooke said.
“It’s not just experts, we’ve also seen consumer sentiment about whether it is a ‘good time to buy’ drop from a peak of 60% in July 2019 to just 42% in April.”
Transaction volumes had collapsed in recent months and Cooke said borrowers could save on their mortgage by switching to a lower interest rate home loan.
Cooke said positive sentiment about housing affordability had taken an interesting journey over the last 12 months.
“Just under half of experts felt positive about this metric in mid-2019 as prices were falling,” Cooke said.
“One positive of COVID-19 is that economists are once again feeling fairly positive about housing affordability.
“Buyers with a deposit ready to go could be the most powerful players in the market right now.”
Expected house value drops across capital cities