NAB has unveiled scenarios setting out the potential economic impact of COVID-19 - under the most pessimistic scenario house prices would plunge 20.9 per cent this year and a further 11.8 per cent in 2021 | clancyyeates
setting out the potential economic impact of a "V-shaped" recovery and a more gloomy and prolonged "U-shaped" return to growth.The bank's "base case", or V-shaped scenario, assumed house prices would fall 10 per cent this year along with a sharp increase in unemployment, before property prices recovered slightly with a 2.6 per cent increase in 2021.
“The severe downside [scenario] assumes that you get a very significant reduction in global GDP, therefore the demand for Australian goods and service offshore and exports would fall, that would clearly drive unemployment up. You would have the potential impact on house prices as a result of that, as the economy really struggles,” he said.
“I think house prices are highly likely to fall more than 10 per cent in the near-term. The question is how quickly they rebound,” he said.
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