Property plunge is on the cards

HOUSING market sentiment across Australia has collapsed, with the COVID-19 economic downturn expected to push down property prices by almost 15 per cent.

The latest National Australia

Bank residential property survey reveals housing market sentiment in the second quarter has dropped to negative 33 points, a 71 point fall compared with the first quarter, when it was 38 points.

NAB’s survey indicates the biggest effects were likely to be experienced in Victoria and New South Wales, where house prices and rents are expected to fall in the next 12 months.

The bank expects property prices to fall between 10 per cent and 15 per cent as a direct result of the pandemic.

NAB said the price declines had been better than expected but capital city property markets were yet to reach the trough in the cycle.

“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,” NAB chief economist Alan Oster said.

Regional breakdowns show Victoria has fared the worst, followed by New South Wales, Queensland, South Australia and Northern Territory.