Second Wave sends Clearance rate down to just 59.4%

With 49 new COVID 19 cases reported in Victoria today, Melbourne auction clearance rates have taken a tumble to 59.4% according to Domain.

 

Time to pick up cheaper properties in Melbourne?

 

Could be. What was the experts predictions for the worst case, a second wave? Down 40%?

 

I really hope Melbourne can contain their second wave.

Already after 1st wave Melbourne remains to be Australia's most exposed market in terms of fleeing students, fleeing foreign nationals, and locals unemployed moving back in to parents houses or cheaper-by-the-room share houses.

Like Sydney, the only stock I'd ever dream of touching would be houses or maybe townhouses in certain areas. But then... those stock items have mostly maintained their (mostly unattainable!) values.

 

No shortage of buyers out this weekend in Brisbane along with some strong bidding. It's like nothing has happened here with Covid.

 

The spike in Melbourne isn’t being called a ‘second wave’ according to news articles today.

Federal health authorities say 'this is not a second wave'

 

Still boomtimes in certain aspirational surburbs. good luck getting in if in middle class unless your willing to do something different besides borrowing 80% from the bank. Rich getting richer and middle class getting relative

Becareful trying to pick the bottom if you need to rely on the bank to lend you 80%. Even if there is a drop it will likely be that the banks reduce their appetite for lending at that time meaning you cannot take full advantage. If you are a middle class salary earner and have the means getting into the aspirational home/suburb of your dreams right now, then consider whether the bigger risk is actually being eventually priced out of that desired suburbs due to your reliance on the banks.

 

Only 75 cases today!!

 

Who cares if its a second or third wave .... its the impact on business’ a disaster

Melb is going to be hardest hit in Oz

Seems everyone giving high fives on how well Australia has done with corinavirus and ignoring our economy will be a basket case

September will reveal how bad

 

What are the consequences to an economy of having a highly infectious virus not being controlled/managed/suppressed effectively? Look at the USA. There you'll find an economy on its knees, unemployment at 15% and rising and a population where the poor have very limited or no access to health care during a pandemic. Almost every major economy has been affected directly by this pandemic irrespective of how good or bad it is perceived an individual country handled it.

Despite the current problems in Victoria, I think Australia has done pretty well in a global comparison. There is no easy answer with a rule book to follow.

 

Havent you heard? Bad news = good news for asset prices these days

 

Is there a reason why you think Jobseeker will end if it may result in the ending of the Aus economy? The govt has a perfect excuse to run a deficit now..

Also this pandenmic appears have fast tracked the UBI/socialist agenda.

 

What happened specifically with Melbourne? I thought they were handling COVID well a month or so ago. This happened so quickly.

I already had a trip booked for early July, now I'm going to have to delay it.

 

I'm with @MTR here, it actually doesn't matter how many waves we have in the coming year.

Victoria is incredibly reliant on population growth fueling housing demand, and sales of houses fueling government spending (land transfer duty being the state's biggest source of revenue).

Until there is population growth there will not be underlying demand for housing (particularly not the 6% YoY growth the state budget forecasts). Until there is housing demand, government revenue is hampered. Sure, the government can continue to bankroll things, but does that really come with no long term consequences?

We'll be stalled until borders re-open. 2021 is now the optimistic forecast, 2024/25 is the forecast for tourism to return. So even if this second wave adds a month or two more lockdown, its hardly going to impact the actual number of people who need a dwelling in Victoria.

 

Cos its costing Australia $83million per day at the moment. This little chestnut

 

Because government said it will cease in September

Whats unemployment benefits?
Whats jobseeker?

If we have high unemployment we will see a downturn in the economy.
Just pay attention to share and property market its going to be a hell of a ride

 

To put that in perspective, franking credit dividend imputation refunds cost around $14m per day (i.e. refunds to people who pay no tax).

Jobkeeper isn't THAT expensive.

 

this is a general comment and tell me which country or international city economy wise and property market not impacted by covid? One thing for sure Australia managing this crisis much much better than other countries ( Including US)

during the crisis I feel so lucky living in this country, I am sure there will be challenging time a few months ahead but we will get through this and remember Melbourne and Sydney are international cities and very desirable to live so like it or not these two countries will attract more people to come , even after the covid Australia will be more desirable than before due to good healthcare, education and easy border control

 

If you say so?

But you need to ask the question why do we need it in the first place? Will it need to be extended.
What happens in 6 months time??we just dont know

One thing for certain is you cant close a country and expect that there will be no negative impact

 

I agree with MTR, near term it does sound bad especially for Melbourne. However, like the share market, there are assets that will do well regardless of the economic outlook and some may even suprise to the upside (look at the sales figures for shaver shop, adairs, beacon lighting, james hardie etc) thus I think it is important to assess each asset on its own merit. This may generate some great opportunities for those optimistic enough about the future.

The crazy thing is that two people on the current jobseeker/jobkeeper (3k a fortnight) can basically support a $1mill loan ($4k monthly p&i repayments) and have spare $2k to boot.

While I do hope that the market does tank temporarily so I as an average salary and wage earner can buy my 3 bed home in albert park or portsea, or even REA on a 5% dividend, that is highly unlikely and will remain a pipe dream as long as the current monetary system remains in place.

Regarding the closure of the country. Melbourne shouldn't be hit too hard with the lack of international tourism as interstate tourist to Melbourne accounted for about 3x international. Couple that with Melbournians no longer going abroad and that should net it out pretty closely. The big issue is with the international students where in May it came in at 16% lower than prior year. Again not horrible but would make a dent on the rental market in some areas - before Covid rental yields in Melbourne CBD were sky rocketing some netting 5% after all costs as capital values had not increased but rents had so even if they reduce their rent significantly they could still obtain a 3% net yield which shouldn't do too badly on the backdrop of negative bond yields (if they can find a tenant ofcourse - but looks like banks will be supportive for a while). Many students that have enrolled are still clamping at the bit to make it over. One should not underestimate the quality of life here and their ultimate goal of gaining citizenship one day - if they can find a job that is. I know of dentists from India that is quite happy with working in a milk bar and driving a taxi until he can gain accreditation here.