While many have had their say, with drops of 10% all the way to as much as 40% predicted by various segments of the industry, few can say for certain just how the COVID-19 pandemic, and in turn the economic recession it has promoted, will impact the property market.

The housing market is far from immune to a recession, but we cannot be certain just yet what the symptoms will be. Prices have begun to dive, but is this just the beginning or are we already at the darkest point and dawn is fast approaching?

History provides us a good marker for this. As useful guides for the future, examining previous economic downturns including the recession of the early 90’s and the GFC in 2008 provide a clearer picture of what to expect.

Infamously labelled the ‘recession we had to have’ following the Black Monday share market crash in ’87, Bob Hawke’s Labor government faced Australia’s first recession since the Great Depression in mid-1990.

Data suggests the property market was fairly stable in the months and years leading up to this, but a combination of factors would ultimately lead to spikes felt in most states. Brisbane and Hobart saw the greatest growth, while NSW and Victorian markets experienced very slight drops.

This was mostly due to the dramatic decline in the ASX leading to many people pulling their money out of the stock market and reinvesting in housing.

Perhaps a more accurate representation of what we can expect, however, can come from property prices during the GFC.

While not technically a recession, as it did not promote two quarters of negative growth, the GFC’s impacts were short and very, very sharp.

According to data recorded from the peak to trough period of mid-2007 to early 2009, capital city housing prices fell by an average of 7.6% and took many years to recover.

Again, though, the economy was in rather good shape prior to the GFC, unlike what we have seen prior to COVID-19.

To date the market, while dropping, has remained resilient – but we will likely need to wait until the impact of staggered reductions to JobKeeper and JobSeeker begin this month, and home loan repayment deferrals end, to know the full extent of the damage to the market.