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Although the long-awaited end of the pandemic seems near with the roll-out of the vaccine and pandemic control by the government, it seems we are on a roll for recovery. However, it can’t all be positive, Economists are now warning that the stimulus measures that were designed to respond to the pandemic could cause economic imbalance.

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ANZ senior economist Felicity Emmett expressed that the removal of the stimulus packages could cause a surprise surge in house prices, far beyond their current boom.

 

”Having a situation where withdrawing stimulus while interest rates remain very low for a very long time is likely to create imbalances in the economy, contributing to surging house prices.” says Emmett.

 

Felicity Emmett, ANZ’s Senior Economist, expressed that the removal of the stimulus packages could cause a surge in house prices, far beyond their current boom. 

The prime minister flagged the federal government would start to look at budget repair measures once unemployment was below 6 percent.

Corelogic head researcher Tim Lawless said there was no evidence of a housing bubble yet, but said he expected things would change when the HomeBuilder stimulus package was withdrawn.

“First home buyer activity will fade in the second half of the year… When we combine those economic stimulus packages together it is a loss of a leg up which will result in less first home buyer activity.” Said, Lawless 

There is an anticipation for a ‘slow down’ once the HomeBuilder Grant and Stamp Duty Concessions are no longer accessible, as expressed by the Managing director of the Chinese-backed property group Jinding Liz Ronson. 

“HomeBuilder has been so significant for everyone in the house and land space,” Ronson said.

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