Two hardworking nurses were left scrambling to make ends meet after buying a new house but unable to sell their previous home in a “battered” Australian property market.
Real estate figure Tom Panos said their story represented the “domino effect in our economy” brought by falling prices and buyer confidence, warning those celebrating the downturn of several “unintended consequences”.
In a week in which his passionate and viral take on the housing market as being the worst in decades saw him mocked in some quarters, Mr Panos told news.com.au he understood the support for falling prices but said people should be aware of unwanted side effects.
He shared the case of two married nurses who bought a $2 million property this year, but were now in “survival mode” and paying off two mortgages as they battled to sell their old place despite dropping the asking price by 20 per cent.
“I am in a mess now because of this budget,” one of them told Mr Panos in a message.
“I am not a greedy investor. Me and wife are hardworking nurses. Really struggling.
“I bought (a) new one without selling. That was my mistake. I expected it to be bad. But I did not expect that market will be dead.”
Auctioneer Mr Panos told news.com.au that as a father of two daughters in their 20s he understood why “certain parts of the community that would be celebrating watching house prices go down”.
“That’s a good thing,” he said, but added he was “also very mindful of the unintended consequences that this has caused”.
“The biggest one being a gridlock in volume,” he said.
“It’s not that just property prices have gone down, it’s that volume has actually collapsed. Anecdotally, we’re looking at volumes that have dropped by 30 to 40 per cent.”
Nation ‘catches the flu’
Mr Panos said although Sydney and Melbourne were “the most battered” markets, there were signs of other cities such as Brisbane starting to go south.
News.com.au reported on Monday Melbourne has been leading the national downturn, with almost one in three homes selling tens of thousands of dollars less than first asked.
Analysis by property tracker Spachus found 29 per cent of dwellings for sale in the Victorian capital had reduced their original advertised price, outstripping Sydney’s rate of 12 per cent.
“Unfortunately when Sydney and Melbourne sneezes the whole country catches the flu,” Mr Panos said.
Home values across the nation have been hit throughout a year of interest rate hikes and a slowing economy, even before investor tax settings were changed at the May budget.
News.com.au has reported experts believe prices could go “sideways” for the next decade in a country where the majority of people’s wealth was tied up in property.
Australian Bureau of Statistics data showed household wealth reached $19.2 trillion in March, with property accounting for $12.98 trillion – or 68 per cent of the total.
The latest inflation data for the June quarter is due to drop on Wednesday, with HSBC chief economist Paul Bloxham saying it was “expected to confirm that inflation was too high”.
Mr Bloxham said economic growth had weakened over the past six weeks, but with inflation well above target the Reserve Bank of Australia faced a “tricky choice” at its next meeting.
The lingering inflation concerns could pave the way for the cash rate to rise for a fourth time in 2026, a move Mr Panos said would smash the last section of the market still performing – the lower end.
“I believe that will actually be another driver to even less confidence and uncertainty in the market,” he said.
Businesses and budgets hit
The senior auctioneer vented on Saturday that it was “worst day” he had experienced in 30 years in the industry over the weekend, with zero out of six auctions ending in a sale.
On Tuesday, he rattled off a list of professions that have been directly affected by the cooling market, including agents, mortgage brokers and conveyancers.
Then there was photographers, videographers, removalists, stylists and tradies who have lost work or even been forced to shut up shop, he said.
“They’ve all been impacted, these peoples’ businesses,” he said.
“I have (messages) from all these people, and many of them are saying, ‘We have no choice but to actually close our business’.”
Mr Panos said another significant fallout from the drop in values and sale volumes was the bottom line for state budgets, which rely heavily on stamp duty revenue.
The NSW government had previously collected more than $8 billion in stamp duty, according to the Property Council of Australia, but its latest budget has forecast a large drop.
“The (budget) papers make it clear that the Government now expects to collect $8.4 billion less than it originally forecast from property taxes, like stamp duty and land tax because the property market has slowed,” the Property Council said in a submission this year.
Mr Panos said he was concerned at what the new figures would be and asked whether the federal government had modelled for the states and territories to experience budget shortfalls.
“Because I can tell you it’s going to be a very, very big number, he said.
“Because the government originally thought that what that was going to do is bring a strategy in place that meant volume was going to stay the same, or they were going to do is to re channel investors to move from used properties to brand new ones.
“And that’s why they put the incentives of the new properties, retaining capital gains tax exemptions and the negative gearing.
“However, that strategy has been rejected by the pundits.”
He said several “markets” have been emerging in Australia in 2026, with the prestige end experiencing falls of 20 per cent and the middle hit hard with a drop of around 10 per cent.
The lower end had been propped up by first home buyers, some using the federal government’s 5 per cent deposit scheme, and the remaining property investors.
Mr Panos said the silver lining in the current situation was the opportunity for people already in the market to upgrade to bigger homes, with the gap between each rung growing shorter.
He believed the upcoming Spring rush could be the “biggest bonanza buying spree opportunity we’ve seen in many, many years for buyers”.