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What do the leading property economists have to say about COVID-19's impact on the Australian Residential Property Market, from consumer confidence and price growth to the economy and unemployment?

This week (30th March 2020), Sarah Hunter, Chief Economist at BIS Oxford Economics; who is a very highly respected panelist on the Meridian Investor Panel, led a detailed discussion, where she highlighted her economic outlook and the extent to which COVID-19 is expected to impact the Australian economy and Residential Property Market; based on the ‘current state of play’.

The ‘state of play’ is changing rapidly at the moment (April 2020), and this discussion was before the announcement of $130bn of further fiscal stimulus.

Are property economists confident?

Sarah and the economists at BIS Oxford Economics are confident in this pandemic having a large, but ‘short, sharp, shock to the Australian economy.

It's expected that once restrictions are removed from the Government and normal activity can return, there will see a ‘v-shaped recovery’. This is unlike the slow recovery experienced in the GFC.

“The recovery phase is expected to be relatively quick and very strong in this case."

Below are the key takeaways from BIS Oxford Economic's research.

Consumer Confidence

Consumer spending is likely to remain low until consumer confidence returns to the market. Consumer confidence is currently at the lowest level since 1990, as shown in the graph below.

Australian Economy

The economy is expected to enter a recession despite the fiscal and monetary support that the economy is receiving. However, this is not like recessions of the past as this is a much-reduced timeframe on recovery.


Unemployment is expected to spike into low double digits this year, before returning to 7% by the end of 2020.

The long-run impact of COVID-19 on Australian economic growth is likely to be small, with only certain sectors having significant impacts.

The Australian Government's policy aims to support those individuals made unemployed and also to provide support to business owners.

House Price Growth

BIS Oxford Economics forecasts have changed since previous ones made earlier in the year, showing a reduction in growth rate expected over the next 6 months. However, by September 2020, strong growth rates are expected to return; with Sydney, Melbourne, and Brisbane to increase their growth rates to 8-10%.

I hope you found these insights useful. Remember, with the current state of the pandemic, we are receiving new information daily from reputable economists and research houses.

To stay up-to-date make sure you join our Weekly Property Market Pulse Newsletter here.

Adam Duffy - Partner at Meridian Australia

P: (02) 9939 3249


[1] Sarah Hunter - BIS Oxford Economics


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