Reports of a stronger-than-expected job market and only modest house price declines during the Coronavirus lockdown suggest property values won’t fall as much as previously thought, say market experts. UBS, which previously forecast a price collapse, has “upgraded” its outlook for the housing market. The bank now expects a smaller price decline of between 5% and 10% this year.

Real Estate Institute of Australia president Adrian Kelly says previous forecasts of 30% price drops were “highly questionable”. Kelly says the property market is experiencing an increase in prospective buyers, while listings remain lower than normal. “It is simple economics that when supply decreases and demand remains that prices edge upwards,” he says. CoreLogic, ANZ and AMP Capital are in unison with their forecasts of a peak-to-trough decline of less than 10%. “The early signs of a trough in the labour market and consumption mean the contraction in GDP is less than initially forecast,” says UBS. “This revision is more about the economy than the stimulus.”