Trent Wiltshire is an economist at Domain, focusing on the property market, housing policy and the broader macro-economy. When the purses of the every day consumers close the economy stops and its a slippery slope from there. Join Michael Yardney's inner circle of daily subscribers and get into the head of Australia's best Other regions where prices might fall include Cairns and Hobart and the broader Tasmanian market. In Western Australia, almost all social distancing restrictions due to robust demand from China. data indicates that while people think it might be a good time to buy, there is no rush because they think prices may fall a bit further. A rmajor regional centre, Wollongong's real estate market is made up of a diverse range of property types. When: Every Thursday, 5:00pm-9:00pm Where: Crown Street Mall, Wollongong, NSW, 2500 Highlights: An all-weather outdoor night hot food market… Inner-city Sydney and inner-city Melbourne look to be most at risk of price falls due to having a large proportion of renters and also due to significant job losses, particularly in hospitality (see blue dots in graph below). property investment advisor and a wide team of leading property researchers and commentators.Michael is a director of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. The recent COVID-19 spike in Melbourne may also weigh on prices. I have not seen anybody forecasting the growth of house market in the next five year. Those who have structured their portfolios and lives correctly will see good and bad times as a win-win.

I feel Media has a lot to answer for, we do need to be honest here and recognise that its no coincidence that what Media creates is usually the outcome.

Or will certain types of property fall in value much more than the other than others?And while I don’t disagree that “overall” our property market could easily fall 10% in the short term:But this will be on a on very low levels of transactions and the pace of recovery from that point will depend on the state of the wider economy.The key factor supporting prices so far is that few people have been forced to sell their homes due to losing their jobs or having their incomes cut.This has been enabled by the government’s financial support packages assisting households whose income has fallen, in combination with banks allowing people in financial difficulties to defer mortgage repayments.But this will be on a on very low levels of transactions and he pace of recovery from that point will depend on the state of the wider economy.On the upside, households and property investors whose incomes remain stable and secure will be able to take advantage of historically low interest rates.This should support a return to stronger levels of price growth in the medium term.The following chart shows how Australian residential property has historically fared well against negative economic shocksIn fact, as an asset class, bricks and mortar has performed exceptionally well during previous economic shocks.What the above and the following charts show is that negative economic shocks do not necessarily lead to severe declines in property prices.Property does not show the same volatility of shares during a downturn nor the same decline in values because it is used to living and therefore not a speculated upon the shares.Additionally it cannot be bought or sold as quickly as shares meaning price movements are not as volatile.This time round, with the banks giving mortgage deferments or holidays, it is unlikely that we will have a large number of forced or mortgagee sales that could undermine market confidence.As I said, moving forward some suburbs are likely to only experience minimal falls in value while others will suffer more significantly.Just think about the typical demographic who bought in the new housing estates in the outer suburbs of our capital cities.Residents there are typically at the same stage of their life cycle, getting their foot on the property ladder, setting up their families, paying a large mortgage and carrying significant credit card debt.These are the types of locations where residents are more likely to suffer mortgage stress, and if people need to sell up, at a time when their neighbours are in the same boat, property values could drop significantly.The same is true for the many investors who have bought cookie cutter apartments in and around our CBDs and who now have minimal or even negative equity in their properties.With few new investors buying this type of property, CBD apartments are likely to fall in value significantly.On the other hand, the demographics of our established middle ring capital city suburbs are very different as they are populated by a range of families at different stages in their lifestyle.Some residents would have bought their property 30 to 40 years ago and paid off their mortgage a long time ago.Others may have purchased the property 15 years ago and paid off a significant portion of the debt while living in the same street there would a few newer residents who have significant level of debt against their homes.In these suburbs demand currently demand is higher than the undersupply of properties available and values in the suburbs are likely to hold up well.The following chart suggests that Hobart will be more affected than other capital cities by the strict social distancing measures imposed to prevent spread of COVID-19.At the other extreme in the ACT, where employment is more concentrated amongst public Inspiration, employment and incomes not as broadly affected.Not surprisingly people working in the accommodation, food services and recreation industries have been hardest-hit in losing jobs over the last few months – see chart below.If you think about it, many of these people will be younger and living in rental accommodation rather than being home owners.This suggests our rental markets will be harder hit than our housing markets, and that’s actually how things are playing out .Australia’s population was growing by around 360,000 people per annum, meaning we needed to build around 170 to 180,000 new dwellings each year to accommodate all the new households.Since 60% of our growth is dependent on immigration, in the short-term population growth will fall, but they should increase again as soon as overseas immigrants will be allowed to come to our shores.In the meantime, the oversupply of dwellings in many Australian locations is now dwindling and there are very few new large projects on the drawing board.Considering how long it takes to build new estates or large apartment complexes, we’re going to experience an undersupply of well-located properties in our capital cities in the next year or two.In the next few months supply will be constrained because of very few vendors are putting their properties on the market.Think about it… unless you really had to sell you wouldn’t place your property on the market today would you?The lack of good stock at a time when there is still reasonable demand by purchasers looking to take advantage of the opportunities the market presents means it is unlikely house prices will fall dramatically.With interest rates at historic lows, housing affordability is as cheap as it ever has been.I’m not saying the properties are cheap – they never have been if you want to live in great locations in major world class cities.But for those first home buyers wanting to get a foot on the property ladder, or established home buyers wanting to upgrade, or investors looking to hold onto a property, the holding costs are less than they ever have been.And the RBA has declared that interest rate will not increase until unemployment is back to within their preferred range of around 4.5%.They have said this will be unlikely to occur in the next three years.In other words we are in unprecedented times where we don’t have to worry about rising interest rates the foreseeable future.

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