COVID-19 is unlikely to improve housing affordability: REA's Nerida Conisbee

EXPERT OBSERVER

There are always some businesses and individuals that do well out of a downturn, and the same can be said for property.

Some markets will be hit but not every market will be impacted in the same way.

While it is still very uncertain how much prices will fall, rising unemployment and problems in the rental market suggest that eventually they will.

The areas most at risk are those that feature large amounts of rental apartments. In contrast, premium suburbs and big homes on big blocks are still seeing high levels of activity on realestate.com.au and a drop in listings suggests bargain hunters may be disappointed.

While falling home values usually improve affordability, it is only helpful if people are still in a financially secure position to purchase them.

Without a job, cheap housing is still unaffordable.

Without a secure job, banks may be less inclined to lend. We’re yet to see the impact of COVID-19 on house prices, and while we can safely assume that they won’t rise in the next few months, they won’t necessarily fall by a meaningful amount either.

NERIDA CONISBEE is the chief economist for the REA Group