Loading Analysts say clearance rates are a leading indicator of major changes in property prices. Martin North, founder of Digital Finance Analytics, says even if the coronavirus-induced economic downturn is relatively short-lived, there could be property price falls of between 15 and 25 per cent over the next two or three years. "If there's a longer-term crunch where the unemployment consequences and the failure of businesses is longer, then I think it could be 20 to 30 per cent," Mr North says. If the global disruption is prolonged, then it could top 45 per cent. However, the major price falls would not be uniform across the country and house prices are expected to hold up better than apartment values.

"Generally, houses hold their value more, other than the top end of the market, which is more volatile, and will do better than units," Mr North says. "There are too many new [units], a lack of investors and there's a problem with [building] defects." Hayden Dimes and Felicity Emmett, economists at ANZ bank, say the shutting down of auctions and home opens has seen both both buyers and sellers evaporate. "As buyers and sellers dry up, we think properties that do trade through this shut-down period will see price falls," they say.

The economists are expecting major price falls to start showing up as early as this month. Even when social distancing measures are removed, they say it is unlikely prices will bounce back. "Despite enormous fiscal support, unemployment is still expected to rise sharply through this period and is unlikely to fully recover for some years," the ANZ economists say. Loading Replay Replay video Play video Play video Households are likely to have less appetite for debt, which would likely result in a slow recovery for house prices, they say. Shane Oliver, chief economist at AMP Capital, says higher levels of unemployment would trigger debt-servicing problems, which is bad news for property prices. This comes against a backdrop of very high household debt.

He expects demand for property would be depressed for some time after the economic shutdown measures are relaxed. Loading "Hopefully, the federal government’s wage subsidy program will keep the rise in unemployment to below 10 per cent," Dr Oliver says. "This, combined with various income-support measures and bank mortgage payment holidays, may serve to keep forced property selling to a minimum and price declines modest at around 5 per cent," he says. However, a long and deep coronavirus-driven downturn in the economy would point to a deeper property price slump of 20 per cent, or more, over the next 12 months, he says. More homebuyers, particularly those who purchased recently, will find that they are in "negative equity", where they owe more on their mortgage than their home is worth.