He said it would be a much bigger impact than previous shocks to the market including the 25 per cent fall during the global financial crisis.
“Buying property and selling property requires a big commitment and confidence and that’s just disappearing,” he said.
But REA Group chief executive Owen Wilson warned some of the reactions to the new rules were “over-stated”, and auctions were a minority of property sales, while he expected prices might reduce slightly rather than crash.
“At the moment, we haven’t seen the drop in listings but it will come, there’s absolutely no doubt about that. Consumer confidence is a big driver of the property market, we can’t assume there’s no impact,” he said.
Domain chief executive Jason Pellegrino said the industry had been preparing for “weeks” for stricter social distancing when viewing and selling homes.
“I think anything that gets in the way and causes friction to any marketplace … is going to have an impact,” he said, although he said the property market had proved “resilient” over time, including bouncing back quickly after SARS.
Australian Community Media executive chairman Antony Catalano, former Domain CEO, said he was not surprised “open for infections” had been banned.
“I think the reality is that activity will slow. It has to slow because in order to get the best price for your house, you need a good marketing campaign and get the most buyers,” he said.
“There is a natural pent-up demand for people who have sold and need to buy a new home and there will be a rebound when this is over.”
Starr Partners chief executive Doug Driscoll said the agency’s advice a week ago was to stop doing open homes in favour of private inspections.
“Is property a good investment in the longer term? Absolutely. Do people think about this when they’re concerned about putting food on the table? Absolutely not,” he said.
“They’re more inclined to drag money out of shares and put it under the mattress than buy real estate in a recession.”
McGrath Estate Agents founder John McGrath said for those not fearful of unemployment it was still “business as usual”.
Prime Minister Scott Morrison has warned the country is facing a “twin crisis” from the virus itself and the financial repercussions of dealing with it.
Virgin Australia has stood down 8000 of its 10,000 workforce while Star Entertainment said it was standing down the bulk of its 8100 workforce because of closures to its food, beverage, conferencing and gaming facilities.
Sydney-based employment data firm HRO2 Research said its tracking of new job ads showed through the third week of March, they were 37.2 per cent lower than for the same week last year.
When pre-existing job ads were taken into account, advertisements last week were 21 per cent lower than the weekly average of the past 12 months.
“We know we have gone over the cliff. It’s a matter of just how far we fall and how long it takes to turn things around,” HRO2 Research director Bob Olivier said.
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Jennifer Duke is an economics correspondent for The Sydney Morning Herald and The Age, based at Parliament House in Canberra.
Shane is a senior economics correspondent for The Age and The Sydney Morning Herald.