Prices to Defy Expert Economists' Predictions
First National Real Estate anticipates the market will lift this spring, with pent-up property demand a likely precursor to rising prices - despite Australian expert economists having flagged a prolonged downturn and falls in property prices of between 10% and 30%.
First National Real Estate’s CEO, Ray Ellis, is adamant that with total real estate listings at their lowest levels and demand exceeding supply during the COVID-19 lockdown, listing volumes – while now rising - will remain below normal, thereby leading to strong demand in spring.
‘‘If you step back from the distraction and noise of the predictions of economists, there are genuine factors pointing towards a strong recovery this spring, in a market characterised by first home buyers taking advantage of the percentage of investors who choose to exit, and families activating long-held plans for change,’ says First National Real Estate’s Chief Executive Ray Ellis.
Across First National’s 300+ office network, members report a marked increase in lifestyle and regional property enquiries from city residents. This appears to indicate the COVID-19 lockdown has led to a re-assessment of property and life-goals priorities.
‘Unquestionably, while Australians have been in isolation and working from home, they’ve been researching their next move’ says Mr Ellis.
‘They’ve been considering future plans like upsizing, downsizing and leaving cities for regional locations, and it seems they’re planning to bring forward plans that had previously been considered things they’d do in the distant future. In the past week alone for instance, CoreLogic has reported a 15% surge in pre-listing activity, meaning agents have been running appraisal research reports on their homes’.
Unemployment is considered to be elephant in the room by commentators predicting house price falls, but as the Real Estate Institute of Australia has pointed out, when there was a sustained period of unemployment above 10% during the 1980s and 1990s, median house prices remained stable or, by and large, increased.
‘Even though May’s housing data shows a slowing in house prices growth, and small falls in some segments – as we predicted - the data has been adversely skewed by larger adjustments happening in the upper quartile of the marketplace than in the more affordable prices ranges’ says Mr Ellis.
Barring any uncontrolled outbreaks of COVID-19, First National believes spring will see the release of significant pent-up demand as a result of the COVID-19 lockdown.