Adelaide house prices could bounce back from the coronavirus-led economic downturn in just a few years if history repeats itself.
New research by the Property Investment Professionals of Australia reveals house prices jumped, often significantly, five years after the most recent recessions and downturns.
It analysed annual median house price and index data for seven years, including the start of each recession or economic downturn, from 1973 to the GFC.
Five years after the recession of 1973 to 1975, Adelaide’s median house price jumped 37.7 per cent.
Similarly, it increased 31.3 per cent in the five years ending 1988, 5.9 per cent by 1996 and 7.1 per cent by 2014.
“Some locations performed better than others, mostly likely due to local economic factors after each period,” he said.
“However, the research shows that talk of impending property ‘doom’ has never happened in recent history – and these recessions or downturns lasted multiple years rather than a few months.”
Mr Koulizos said there were periods of annual house price falls in many capital cities over the three most recent economic downturns, but those reductions were never sustained.
“The moral of the story is don’t panic. Property has shown its resilience through
economic shocks before and we have no reason to expect it won’t do so again,” he said.
LJ Hooker SA/WA managing director Andrew Friebe said demand for fewer properties on the market was preventing Adelaide’s house prices from tumbling.
“There are multiple people interested in a property so that’s likely to tip prices higher.“
He said as long as the market wasn’t flooded with listings in the next few months as COVID-19 restrictions were eased, prices would continue to hold strong.
“I’m very confident the market will bounce back quickly,” he said.
InSynergy Property Wealth Advisory chief investment adviser Richard Sheppard said pockets of Adelaide had remained robust throughout the coronavirus crisis, and he believed property prices were unlikely to fall much further across the country.
Jessica Brown, news.com.au, 19 May 2020