House prices to fall by 9pc, says Vic govt

Photo: David Hewison
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THE economic impact of covid-19 pandemic will get significantly worse before it gets better, according to the Victorian government’s modelling which predicts unemployment will soar to 11% and house prices will fall by 9%.

The modelling, undertaken by the Department of Treasury and Finance, found the economic impact of the crisis “will be unlike anything most Australians have seen in their lifetimes.”

Treasury figures suggest 270,000 Victorians will be out of a job, resulting in the unemployment rate peaking as high as 11% in the September quarter this year, more than double the current rate.

The real estate sector will also feel the pain with property prices tipped to fall by up to 9% by the end of 2020.

The modelling shows that Gross State Product will plunge by an unprecedented 14% in the June quarter.

Premier Daniel Andrews said it is impossible to overstate the devastating impact the coronavirus pandemic is having on lives and livelihoods.

“These numbers confirm what the governor of the Reserve Bank and the federal treasury have already made clear – Australia is facing an unprecedented economic crisis – but we’ll keep working with the federal government and as part of the national cabinet to help our nation respond and recover.

“We know the economic impact of coronavirus will get significantly worse before it gets better – and the hard road to recovery will be longer than first expected. We understand these are not just numbers in an accountant’s spreadsheet.

“There’s a real human cost with real consequences for Victorian workers and their families,” the premier said.

The Victorian government is seeking $24.5 billion in emergency funding to set the state up to recover from the pandemic over the next two years.

Treasurer Tim Pallas said this additional funding is dedicated, “to ensuring we can act quickly to respond to the crisis, save jobs and recover once the pandemic is over.”

Already more than $440 million in payroll tax refunds have been paid out to 17,000 small and medium sized businesses. Furthermore, the government will introduce urgent legislation to the parliament to pass a $500 million package for commercial and residential property, as well a moratorium on evictions, pauses rental increases for six months.

In addition to these measures, the government will also defer the planned increase in the landfill levy until 1 January 2021, which will save Victorians $33 million.

The premier said the government is considering further measures and will have more to say in due course.

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