ROOT
End of the road in sight for used-car market’s pandemic boom
Experts warn that the boost in prices generated by the “COVID tax” in Australia’s used-car market is set to run out of fuel sooner rather than later.
End of the road in sight for used-car market’s pandemic boom
Experts warn that the boost in prices generated by the “COVID tax” in Australia’s used-car market is set to run out of fuel sooner rather than later.
While Australia’s used-car market experienced some fast and furious price growth over the past 18 months, experts warn that the end of the road is in sight for those looking to use their vehicles as an asset.
According to a new report by Moody’s Analytics, “It took a confluence of unpredictable circumstances – a highly transmissible virus, a surge in demand for consumer electronics, a fire at a major auto chip producer, and a rapid recovery in worldwide new-vehicle sales – to flip the market on its head.”
While prices in the used-car market are expected to remain elevated for the rest of 2021, “it will not take that much for the market to return to normal”, they said.
Over the past 12 months, Moody’s Analytics found that used-car prices in Australia rose 34 per cent.
However, the rate at which prices have been rising has slowed in recent times, with the sector recording just 10 per cent price growth over the past six months.
After a clear deceleration of price of appreciation in June, Moody’s Analytics predicted that “the most likely path forward” for the market is “a smooth and steady decline in prices over the short to medium term as the supply of vehicles returns and the market reaches equilibrium”.
The report followed similar findings by the Commonwealth Bank of Australia back in January, who noted that “one of the standouts in the COVID-19 environment has been the lift in demand for used vehicles, driving prices sharply higher”.
“Most car owners expect to see the value of their rides slipping over time, rather than rising. But used vehicle prices are up more than 35 per cent compared with a year ago. That lift in used-car prices boosts personal wealth and spending and borrowing capacity,” CBA said.
RELATED ARTICLES
About the author
About the author
Invest
State Street Investment Management holds steady on ETF model portfolio allocations
State Street Investment Management has maintained its asset allocation for its Risk-Based and Target Income ETF Model Portfolios despite market volatility and adjustments by other major players in the ...Read more
Invest
State Street Global Advisors rebrands as State Street Investment Management
State Street Global Advisors has rebranded as State Street Investment Management as the world's fourth-largest asset manager seeks to reflect its growth strategy and strengthen client partnerships. Read more
Invest
North platform launches 'Blend' model portfolios with BlackRock and Lonsec
AMP's North platform has launched a new model portfolio offering called 'Blend' in partnership with BlackRock and Lonsec Investment Solutions, targeting advice practices that want customised ...Read more
Invest
Australian investors add $8.6 billion to managed funds amid global uncertainty
Australian investors demonstrated cautious resilience by adding $8.6 billion to managed funds between January and May 2025, according to new data from Calastone. Read more
Invest
ASX companies gear up for end of financial year reporting season
ASX-listed companies are preparing for the end of the 2025 financial year, with many seizing opportunities to engage with investors through roadshows and industry conferences. Read more
Invest
Digital finance innovation could deliver $19 billion annual boost to Australian economy
Digital finance innovation has the potential to deliver $19 billion in annual economic gains to Australia, according to new research from the Digital Finance Cooperative Research Centre. Read more
Invest
Echelon completes $400,000 acquisition of Northern Territory gas permit
Echelon Resources has completed the acquisition of a 100 per cent interest and operatorship in Exploration Permit EP145 in the Amadeus Basin, Northern Territory, for $400,000. Read more
Invest
Institutional investors return to risk-taking as tariff fears ease
Institutional investors moved back towards risk-taking in late May following delays to trade tariff implementation, according to State Street's latest Institutional Investor Indicators. Read more
Invest
State Street Investment Management holds steady on ETF model portfolio allocations
State Street Investment Management has maintained its asset allocation for its Risk-Based and Target Income ETF Model Portfolios despite market volatility and adjustments by other major players in the ...Read more
Invest
State Street Global Advisors rebrands as State Street Investment Management
State Street Global Advisors has rebranded as State Street Investment Management as the world's fourth-largest asset manager seeks to reflect its growth strategy and strengthen client partnerships. Read more
Invest
North platform launches 'Blend' model portfolios with BlackRock and Lonsec
AMP's North platform has launched a new model portfolio offering called 'Blend' in partnership with BlackRock and Lonsec Investment Solutions, targeting advice practices that want customised ...Read more
Invest
Australian investors add $8.6 billion to managed funds amid global uncertainty
Australian investors demonstrated cautious resilience by adding $8.6 billion to managed funds between January and May 2025, according to new data from Calastone. Read more
Invest
ASX companies gear up for end of financial year reporting season
ASX-listed companies are preparing for the end of the 2025 financial year, with many seizing opportunities to engage with investors through roadshows and industry conferences. Read more
Invest
Digital finance innovation could deliver $19 billion annual boost to Australian economy
Digital finance innovation has the potential to deliver $19 billion in annual economic gains to Australia, according to new research from the Digital Finance Cooperative Research Centre. Read more
Invest
Echelon completes $400,000 acquisition of Northern Territory gas permit
Echelon Resources has completed the acquisition of a 100 per cent interest and operatorship in Exploration Permit EP145 in the Amadeus Basin, Northern Territory, for $400,000. Read more
Invest
Institutional investors return to risk-taking as tariff fears ease
Institutional investors moved back towards risk-taking in late May following delays to trade tariff implementation, according to State Street's latest Institutional Investor Indicators. Read more
