Homeowners being warned to brace for a massive fall in house prices as the COVID-19 pandemic continues to wreak havoc on the Australian economy.
Top bank bosses, Matt Comyn from the Commonwealth Bank, and Shayne Elliot from ANZ, told a parliamentary committee on Friday house prices will likely to fall about 10 per cent over the next year.
‘Our base case scenario would see house prices falling somewhere in the order of 10 to 12 per cent,’ Mr Comyn said.
‘Clearly acknowledging there’s a lot of different parts of the market, broadly regional areas and performing better than metropolitan areas.’
Those to feel the brunt of the fall are apartment owners relying on capital growth, Mr Comyn said.
Top bank bosses, Matt Comyn from the Commonwealth Bank, and Shayne Elliot from ANZ, (pictured) told a parliamentary committee on Friday house prices are likely to fall about 10 per cent over the next year
ANZ is forecasting a similar drop in house prices for the financial year, around 10 to 15 per cent.
But the banking executives were hesitant to predict the entire housing market would suffer the same impact.
‘What we expect is there will be a reduction in house prices … but Australia’s not one market,’ ANZ Chief Executive Shayne Elliot said.
This is despite house prices showing positive growth in the past 12 months according to Corelogic figures, reported the Herald Sun.
Homeowners being warned to brace for a massive fall in house prices as the COVID-19 pandemic continues to wreak havoc on the Australian economy
House prices rose 11.4 per cent in Hobart, 11 per cent in Sydney, 8.4 per cent in Darwin, 7.9 per cent in Canberra, 6.7 per cent in Adelaide, 6 per cent in Melbourne, 4.3 per cent in Brisbane, and 2.1 per cent in Perth.
Back in May the Commonwealth Bank of Australia predicted house prices would drop by up to 32 per cent by the end of 2022.
The median price of a house is $986,000 in Sydney, $782,000 in Melbourne, $716,000 in Canberra,$558,000 in Brisbane, $512,000 in Hobart, $476,000 in Darwin, $481,000 in Adelaide and 462,000 in Perth.
Apartment owners reliant on capital growth are likely to be hit hardest according to Matt Comyn from the Commonwealth Bank
Meanwhile, customers who deferred mortgage payments and personal loans will soon be asked to pay up.
Australians owe the Commonwealth Bank of Australia a total of $60billion dollars through the deferral of more than 250,000 loans.
While around 84,000 ANZ customers have postponed payments for their mortgages.
Customers will be forced to start paying up in September and October.
The parliamentary inquiry will continue next Friday with the bosses of National Australia Bank and Westpac to make submissions.