What lies ahead for the housing market

Westpac chief economist Dominick Stephens says that while the market is currently frozen amid the lockdown, when house sales resume prices are likely to decline.

“There is little reason to suppose that the long-run fundamental value of property has changed, but short-term market realities certainly have.

“Job losses and business failures will put fewer people in a position to buy property, and other erstwhile buyers will be too nervous to act.”

The plan to grant repayment holidays to mortgage borrowers affected by Covid-19 will limit forced selling, but there will still be some people whose circumstances require them to sell later this year, he says.