In a message to investors, LaTrobe Financial senior vice-president and chief investment officer Chris Andrews said he anticipates the housing market to have a "strong and sharp rebound", highlighting the "immense resilience previously seen in the Australian housing market". 

According to Mr Andrews, there is “little doubt that housing sales activity will slow dramatically” beyond April, something made worse by the recently announced restrictions on open houses and public auctions

“Fundamentally, as we’ve said before house prices tend to be less volatile than equity markets because of course housing is not just an investment, it’s also an instant essential consumption item,” Mr Andrews said.

Want to earn a fixed interest rate on your cash? The table below features term deposits with some of the highest interest rates on the market for a six-month term.

Update resultsUpdate
BankTerm DepositInterest Rate Interest Frequency Term Automatic Rollover Maturity Alert Early Withdrawal Available Minimum Deposit Maximum Deposit Notice Period to Withdraw Online Application Joint Application TagsFeaturesLinkCompare
5.20% p.a.
At Maturity, Annually
6 months
$5,000
$1,000,000
Featured
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5.30% p.a.
At Maturity, Monthly
6 months
$25,000
$1,000,000
31 days
5.15% p.a.
Annually, At Maturity
6 months
$1,000
$500,001
31 days
5.25% p.a.
At Maturity
6 months
$1,000
$1,000,000
8 days
5.25% p.a.
At Maturity
6 months
$1,000
$1,000,000
31 days
  • Deposits are protected up to a limit of $250,000 for each account
  • Added loyalty bonus of 0.10%
5.05% p.a.
At Maturity, Annually
6 months
$25,000
$10,000,000
31 days
5.00% p.a.
At Maturity
6 months
$100,000
$200,000
5.00% p.a.
At Maturity
6 months
$500
$1,000,000
31 days
5.00% p.a.
Annually, Semi-Annually, At Maturity, Monthly
6 months
$5,000
$99,999,999
5.00% p.a.
At Maturity, Annually
6 months
$5,000
$24,999
31 days
5.00% p.a.
Annually, At Maturity
6 months
$5,000
$5,000,000
7 days
5.00% p.a.
Annually, At Maturity
6 months
$1,000
$2,000,000
31 days
More term deposits
Important Information and Comparison Rate Warning

All products with a link to a product provider’s website have a commercial marketing relationship between us and these providers. These products may appear prominently and first within the search tables regardless of their attributes and may include products marked as promoted, featured or sponsored. The link to a product provider’s website will allow you to get more information or apply for the product. By de-selecting “Show online partners only” additional non-commercialised products may be displayed and re-sorted at the top of the table. For more information on how we’ve selected these “Sponsored”, “Featured” and “Promoted” products, the products we compare, how we make money, and other important information about our service, please click here. Rates correct as of . View disclaimer.

He then went on to reference the housing market's response to other broad economic challenges, such as the 2008 global financial crisis (GFC) and the credit squeeze of 2017-19. 

“In both cases, there was an initial drop of around 10%, where the largest peak to trough observation in that period was Sydney in the 2017 to 19 period at 14.9% retracement,” he said. 

“That was followed by a sharp rebound, as more normal market conditions re-emerged.

"So that is a really good baseline for our thinking around the house prices.”

Thinking about refinancing to a low-rate, variable owner-occupier home loan? The table below displays some of the lowest-rate variable home loans currently on the market for owner occupiers:

Update resultsUpdate
LenderHome LoanInterest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees LVR Lump Sum Repayment Additional Repayments Split Loan Option TagsFeaturesLinkCompare
6.04% p.a.
6.06% p.a.
$2,408
Principal & Interest
Variable
$0
$530
70%
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  • $2,000 for loans up to $700,000
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5.99% p.a.
5.90% p.a.
$2,396
Principal & Interest
Variable
$0
$0
80%
Featured Apply In Minutes
  • No application or ongoing fees. Annual rate discount
  • Unlimited redraws & additional repayments. LVR <80%
  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
Important Information and Comparison Rate Warning

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of . View disclaimer.

A report last week from investment bank UBS said if the pandemic continues into September and infects 16% of the global population at higher fatality rates, house prices could plummet by up to 20%

A 'moderate' scenario', where infection rates peak in May and are contained in the next six weeks, would see house prices rise by 5%. 

AMP Economist Shane Oliver said the fluctuation of house prices was dependent on how deep a recession there was and how far unemployment rises.

"A sharp rise in unemployment to say 10% or beyond risks resulting in a spike in debt servicing problems, forced sales and sharply falling prices," he said.

"This scenario could see prices fall 20% or so."

LaTrobe anticipates the economic effects of the virus will be seen into the second and third fiscal quarters of 2020, with the GDP expecting a 6.5% hit. 

“Everything is pointing to there being an incredibly sharp drop-off in economic activity which is no surprise to all of us who are now living various modes of self-isolation,” Mr Andrews said.

“As soon as the disease progression allows, for this reason, it is a reasonable base case to assume that the eventual rebound, as we see some positivity around developments in the coronavirus, will be strong, and sharp as well,” he said.

A number of government policies and stimulus measures have been implemented in recent days and weeks that will affect the housing market, including:

Plus, banks are offering six-month mortgage holidays to help homeowners cope with the financial stresses caused by COVID-19. 

What to do in a falling market 

Domain Senior Research Analyst Dr Nicola Powell said it is hard to gauge just how much of an impact COVID-19 would have on property prices, as there is so little to compare the current situation to. 

Dr Powell told Savings.com.au that the nearest comparison in recent times was the outbreak of the sars virus in Hong Kong in 2003, which killed over 800 people. 

"What we saw in Hong Kong was listings, transactions and prices declined during the outbreak of the virus. But as soon as that virus was contained, there was a rebound in property sales and property prices, Dr Powell said. 

"And that rebound was actually at a stronger level than what was occurring prior to the outbreak of the virus. So I'm anticipating a similar scenario for Australian housing markets.

"We have to remember there are lots of different micro-markets across Australia, so all of them are going to be impacted to different degrees.

"But I think what we will see is a slowing of transactions, and that's really the impacts of those social distancing rules that are in place."

Dr Powell said the quicker the virus is contained the quicker a recovery will occur, and she said the Morrison Government's actions mean there won't be as negative an outcome on the property market. 

"Whether you're a tenant or whether you're a homeowner paying off a mortgage, what it (these policies) gives is security," she said. 

"What we need to provide Australians is a secure roof over their head because there's so much uncertainty in the market.

"If we had the risk of many people defaulting and putting their property on the market, that would obviously have a very negative outcome for property prices.

"But I think what the government and the banks are trying to do is mitigate that situation, so it's less likely we're going to see distressed sales because of that policy action taking place."

While Dr Powell said a fall in the market is likely, she reiterated that property investing is a long-term game. 

"If you do purchase, when prices are falling, you need to have that long term view of holding that property, because obviously nobody wants to be selling a home for less than what they paid for it," she said. 

"It's about not overextending and making sure that you can meet those financial commitments, which is extraordinarily important in the uncertain economic future that we're facing."





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