Experts warn of sharp fall in house prices

first_img Video Player is loading.Play VideoPlayNext playlist itemMuteCurrent Time 0:00/Duration 1:46Loaded: 0%Stream Type LIVESeek to live, currently playing liveLIVERemaining Time -1:46 Playback Rate1xChaptersChaptersDescriptionsdescriptions off, selectedCaptionscaptions settings, opens captions settings dialogcaptions off, selectedQuality Levels540p540p360p360p270p270pAutoA, selectedAudio Tracken (Main), selectedFullscreenThis is a modal window.Beginning of dialog window. 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This modal can be closed by pressing the Escape key or activating the close button.PlayMuteCurrent Time 0:00/Duration 0:00Loaded: 0%Stream Type LIVESeek to live, currently playing liveLIVERemaining Time -0:00 Playback Rate1xFullscreenCOVID renter FAQs answered!01:46 MORE: 28-year-old buys house sight unseen, again “Nevertheless, we believe house prices will face downward pressure nationwide, as supportive factors will be outweighed by the impact of the change in net immigration, along with high unemployment and general economic uncertainty.”“Indeed, risks to our forecast for house prices are skewed to the downside, and price falls could exceed 10 per cent if our assumptions about the path of the pandemic prove to be overly optimistic.”The comments came after Fitch modelled the risk to house prices associated with the impact of the pandemic for 2021. Fitch Ratings expects house prices to face downward pressure nation wide but inner Sydney and Melbourne units would be hardest hit.“Fitch estimates that immigration into Australia has added approximately 1 per cent to GDP annually over the past 10 years. An end to pandemic-related travel restrictions could result in a rapid reversion of immigration to previous trends, and we expect new permanent arrivals to remain a driver of medium-term growth.”But, it said, “we do not expect restrictions to be eased until well into 2021, and there may be public pressure on the authorities to limit immigration in the near term as long as unemployment remains high”. Video Player is loading.Play VideoPlayNext playlist itemMuteCurrent Time 0:00/Duration 2:37Loaded: 0%Stream Type LIVESeek to live, currently playing liveLIVERemaining Time -2:37 Playback Rate1xChaptersChaptersDescriptionsdescriptions off, selectedCaptionscaptions settings, opens captions settings dialogcaptions off, selectedQuality Levels540p540p360p360p270p270pAutoA, selectedAudio Tracken (Main), selectedFullscreenThis is a modal window.Beginning of dialog window. Escape will cancel and close the window.TextColorWhiteBlackRedGreenBlueYellowMagentaCyanTransparencyOpaqueSemi-TransparentBackgroundColorBlackWhiteRedGreenBlueYellowMagentaCyanTransparencyOpaqueSemi-TransparentTransparentWindowColorBlackWhiteRedGreenBlueYellowMagentaCyanTransparencyTransparentSemi-TransparentOpaqueFont Size50%75%100%125%150%175%200%300%400%Text Edge StyleNoneRaisedDepressedUniformDropshadowFont FamilyProportional Sans-SerifMonospace Sans-SerifProportional SerifMonospace SerifCasualScriptSmall CapsReset restore all settings to the default valuesDoneClose Modal DialogEnd of dialog window.This is a modal window. This modal can be closed by pressing the Escape key or activating the close button.Close Modal DialogThis is a modal window. This modal can be closed by pressing the Escape key or activating the close button.PlayMuteCurrent Time 0:00/Duration 0:00Loaded: 0%Stream Type LIVESeek to live, currently playing liveLIVERemaining Time -0:00 Playback Rate1xFullscreenSpring selling predictions for 202002:37 Ugly duckling no more after massive three-year renovation Thousands of affordable homes in limbocenter_img Australia net immigration. Source: Fitch Ratings“Immigration had already been slowing prior to the outbreak of the pandemic, but has plunged since the health crisis led to strict controls on international travel,” Fitch said. “The Australian government in May predicted that immigration would fall by 15 per cent in the year to June 2020 (FY20) and by a further 85 per cent in FY21. This would represent a fall of almost 200,000 permanent arrivals in FY21 relative to FY19, and mark the lowest level of net immigration since June 1993.” Inner city units in Sydney and Melbourne were expected to be hardest hit.It estimated that around 76,000 fewer dwellings would be required as a result next year.“Assuming the natural population increase remains similar to previous years, Fitch estimates the population growth for Australia will reach just 0.7 per cent in 2020, a level not seen in the past 40 years, and down from 1.4 per cent in 2019.”Hardest hit from the fall in immigration-led housing demand would be the inner suburbs of the two major southern capitals, it said.“Price declines will vary between regions, and transactions that have collateral concentrated on inner city units in Sydney and Melbourne may be more affected,” it said. Fitch Ratings table over fallout of immigration ban on housing.Fewer adult children moving out was also hitting demand, it said.“The exceptional uncertainty related to the current recession, and its disproportionate impact on young people, is likely to reduce household formation and property demand even more.”It said some factors helped including a significant fall in housing approvals with Australian Bureau of Statistics figures showing 171,000 housing approvals were granted in FY20 – way off the year to August 2016 peak of 243,000.Fitch also pointed out that monetary policy had eased, which could support house prices as well as any government policies specifically targeting support for the housing sector.More from newsParks and wildlife the new lust-haves post coronavirus8 hours agoNoosa’s best beachfront penthouse is about to hit the market8 hours ago LATEST REAL ESTATE NEWS Around 76,000 fewer dwellings were expected to be needed next year as a result of the fall in immigration. Picture: Alan BarberA ban on immigration could make the next few months a great time to buy a house, with COVID-19 sparking conditions not seen in 40 years.The COVID-19-induced ban is set to see Australia hit a giant population slump, the likes of which we have not seen in four decades, according to market experts, Fitch Ratings.The agency’s analysis predicted that Australian house prices would fall by 5 to 10 per cent in the next 12 to 18 months as a result, spared by an estimated 76,000 fewer dwellings required in 2021 because immigration will have dried up.last_img

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