Economists have forecasted a number of suburbs in Sydney will see property prices drop between 10 to 20 per cent, meaning hopeful first home buyers might be able to snag a bargain.
According to Domain, there are 37 Sydney suburbs which could see median house prices fall below $700,000.
In the analysis, it forecasted that every single postcode in western and south-western Sydney fell.
Areas like Schofields, Fairfield Heights and Canley Heights, which, pre-COVID-19, were the most expensive in south-western Sydney.
The median house price in Schofields fell from $777,000 to $693,000 while Canley Heights fell from $765,000 to $688,500. Fairfield Heights fell from $760,000 to $684,000.
And if the property is below $700,000, buyers under the First Home Loan Deposit Scheme threshold of $700,000 will also only pay stamp duty at a concessional rate.
The Domain figures also showed 18 suburbs, where if prices fell by 10 per cent, apartment prices would also fall below the median figure of $700,000.
Brookvale, Norwest and Croydon were the most expensive suburbs to potentially fall in the sub-$700,000 market.
These suburbs medians would fall to $699,750, $695,250 and $693,000, respectively, if the market fell 10 per cent.
If the property market fell by 15 per cent, pockets in western and south-west Sydney like in the Canterbury-Bankstown would see much more affordable apartments. Median prices in Auburn, Cabramatta West and Punchbowl would see prices drop to $697,000, $671,500 and $680,000, respectively.
But for those looking in the inner-city area should wait for the market to fall by 20 per cent. Under this scenario, apartments in Freshwater, Surry Hills, Rushcutters Bay and Turramurra, some of the most sought-after areas in Sydney, will open up for first home buyer.
Domain economist Trent Wiltshire said property market falls would depend on long the COVID-19 restrictions remained in place.
“Price falls will be reasonably modest at around 10 per cent,” Mr Wiltshire said. “There is a high chance there could be a recurrence [of the virus] and if that occurs, that’s when things will drag on for a while.
“If there’s a second shutdown, that will hurt business confidence and that will have a bigger impact and hurt the market.”
Mr Wiltshire said the COVID-led downturn had affected Australians differently with many people, still in secure jobs, who were ready to buy property.
“For some people, it will be an opportunity if prices fall by 10 or 15 per cent. The impact of this recession will be uneven.”
Other inner-city areas, which will become more affordable if property prices fell by 10 per cent include Alexandria, Chippendale, Ultimo and Camperdown.
Ray White Wetherill selling agent Robert Biasetto told Domain while it would be hard to come by due to the sheer lack of stock, it would be good value.
“There’s definitely going to be better buyer opportunities [in weeks to come] … but anything under $700,000, if you can find it, is good value.”
He said prices had remained steady for now.
Meanwhile in other areas of Australia, new data shows that Melbourne’s house prices are holding strong and are not yet being discounted by as much as they were last year.
The latest figures from Domain show that despite the economic uncertainty the coronavirus pandemic had brought to the property market, the average discount – the difference in the price a house or unit was advertised for and the amount it sold for – had risen by just 0.4 per cent since March.