All the latest pricing data indicates only a small hit to the property market from Covid-19 so far. 

A lack of homes for sale is helping to keep prices stable, with Sydney values dipping only slightly by -0.4 per cent and Melbourne -0.9 per cent in May, according to CoreLogic. 

Brisbane dipped just -0.1 per cent and Canberra values increased 0.5 per cent.

At a Glance:

• Property prices along the East Coast are already down about 4-5 per cent 
• There was a-33 per cent decline in sales activity in April during the lock down and an 18.5 per cent bounceback in May
• Another 10,000 guarantees for the First Home Loan Deposit Scheme will become available from July 1.  

The regionals showed more resilience than the capitals overall at 0.0 per cent. 

Of course, this data has a lag to it.

Overall, I think property prices along the East Coast are already down about 4-5 per cent but of course, there are exceptions. 

Values for the best quality properties haven’t moved at all.

The beautiful home in the best street in the suburb will always be attractive and sell well.

Investor grade stock, such as apartments on busy roads with little differentiation, have come back 10-15 per cent but that’s better than it could have been. 

Recent media reports have suggested price falls of up to -30 per cent.

I’ve seen many of these articles over the years and in reality, it’s usually 5-10 per cent and they generally catch up within 12-18 months. 

CoreLogic says there was a -33 per cent decline in sales activity in April during the lock down and an 18.5 per cent bounceback in May.

Pre-listing agent activity on CoreLogic’s internal system indicates there will be an uptick in listings for Winter. 

If you want to sell, Winter is a pretty good time to be doing it.

There will be more stock coming on and at some point, that will dilute demand. 

Buyers don’t need to rush but they shouldn’t sit on the sidelines too long.

We could be entering a window where buyers priced out six months ago now have an opportunity to get in; and with interest rates as low as 2.19 per cent fixed for two years, that’s almost money for nothing. 

Interest rates are protecting owners who have experienced reduced work and rental incomes.

In the GFC, 25 per cent of the market was locked in to fixed rates at 9 per cent.

Now, you can get 2.5 per cent readily, so it’s a different environment. 

This is one factor driving demand from first home buyers, who are looking past the pandemic and buying enthusiastically with the First Home Loan Deposit Scheme for FY20 already ‘sold out’.  

Of the 10,000 deposit guarantees reserved, about 3,100 were in NSW, 2,300 in Victoria, 2,100 in Queensland, 550 in Western Australia, 400 in South Australia, 200 in the ACT, 180 in Tasmania and 35 in the Northern Territory.

Another 10,000 guarantees will become available from July 1.  

We’re not out of the woods yet with Covid-19.

There’s still the possibility of a second wave and some of the financial implications locally and globally are still to play out over the next few months. 

Last week, we learned that GDP for the March quarter fell by -0.3%. It was a big headline because it was only the 4th negative quarter during 29 consecutive years of growth.

But compare this to the rest of the world: -9.8 per cent in China, -5.3 per cent in France, -2.2 per cent in Germany, -2 per cent in UK and -1.3per cent in the US. 

A technical recession might be inevitable but Australia is in a relatively good position.

The banks and governments are providing good support and from an economic perspective, we should take heart in our progress so far.  

The Treasurer, Josh Frydenberg said: “The fact that the Australian economy only contracted by -0.3% shows its remarkable resilience.”  

RBA Governor, Philip Lowe recently stated that “it’s entirely possible that the economic downturn will not be as severe as earlier thought.” 

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