(Bloomberg) -- Australian home prices rose in March but the market is set to weaken as the coronavirus shutdown slams the property industry.
House values in the eight state and territory capitals gained 0.7% last month, according to CoreLogic Inc. data released Wednesday.
However, the increase could be the end of a yearlong upswing that had propelled prices back to near record highs. The government last week banned open-house inspections and public auctions as part of social-distancing curbs to slow the spread of the virus.
Read more: Australia Home Sales Slump After Public Auctions Banned
“We are expecting the number of residential property sales to fall dramatically over coming months,” said Tim Lawless, CoreLogic's head of research. “The wildcard remains the sheer uncertainty of how long this health crisis and associated economic disruption will persist.”
The outlook for prices is more uncertain, with mortgage breaks likely to reduce the number of distressed properties hitting the market. Major banks are offering mortgage payment deferrals of up to six months for borrowers hit by the crisis.
“The extent of any fall in housing values is impossible to fathom without first understanding the length of time this health and economic crisis persists,” Lawless said. “Arguably, the longer it takes to contain the virus and bring economic operations back to normal, the higher the downside risk to housing values.”
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