COVID-19 is a pandemic that has significantly affected the Australian economy. The property market has not been spared, although the impact is significantly less to date than what many industries are currently suffering, that may change. According to Nerida Conisbee, who is the current chief economist at realestate.com.au, we are only experiencing the early effects of the health crisis.
The following guide will play a critical role in making any decision on the property market:
There is a need for wise decisions
According to Cameron Kusher, who is the acting executive director at realestate.com, there is a dynamic change taking place in the property market. Regardless of the borrowing costs being much lower than in previous years, buyers are reluctant to borrow during the health crisis. Consumers are showing caution and trying to make wise decisions as their primary concern now is their job security.
Economic stimulus is helping reduce the economic pain of the pandemic
Conisbee has been keen to note that various sectors in the economy have been affected differently. For instance, hospitality and tourism have received the worst-hit globally. With the lock-down of multiple borders in Australia , the industry is not seeing any revenue. On the other hand, the retail sector, mainly the supermarkets and food related stores , are seeing a large rise in demand due to panic buying.
Although it is important to note once the pandemic has subsided, the economy will normalise. The property market at that time will most likely recover, and buyers and sellers will return. Kusher also predicts that once the pandemic is over the demand and supply of the real estate will slowly return to normal. The various government stimulus packages will definitely help alleviate some of the economic pain of the pandemic but it will take time for that to work through the economy.
The share-market is not a direct reflection of the real estate
The financial markets are facing volatility. Though the volatility does not necessarily manifest in the real estate market. Consibee says that even when the health crisis subsidies, there will be a continuation of uneven equalisation of all economic sectors. Some sectors will boom very well while others will enter the recession stage.
It is worth noting that China is trying to return to normalcy in its retail and manufacturing sectors. The US is making a move to cut its interest rates. Italy, which is experiencing the worst hit by COVID 19, is trying to provide relief to consumers and banks to those with a mortgage.
There is a need for wise decisions
According to Cameron Kusher, who is the acting executive director at realestate.com, there is a dynamic change taking place in the property market. Regardless of the borrowing costs being much lower than in previous years, buyers are reluctant to borrow during the health crisis. Consumers are showing caution and trying to make wise decisions as their primary concern now is their job security.
Economic stimulus is helping reduce the economic pain of the pandemic
Conisbee has been keen to note that various sectors in the economy have been affected differently. For instance, hospitality and tourism have received the worst-hit globally. With the lock-down of multiple borders in Australia , the industry is not seeing any revenue. On the other hand, the retail sector, mainly the supermarkets and food related stores , are seeing a large rise in demand due to panic buying.
Although it is important to note once the pandemic has subsided, the economy will normalise. The property market at that time will most likely recover, and buyers and sellers will return. Kusher also predicts that once the pandemic is over the demand and supply of the real estate will slowly return to normal. The various government stimulus packages will definitely help alleviate some of the economic pain of the pandemic but it will take time for that to work through the economy.
The share-market is not a direct reflection of the real estate
The financial markets are facing volatility. Though the volatility does not necessarily manifest in the real estate market. Consibee says that even when the health crisis subsidies, there will be a continuation of uneven equalisation of all economic sectors. Some sectors will boom very well while others will enter the recession stage.
It is worth noting that China is trying to return to normalcy in its retail and manufacturing sectors. The US is making a move to cut its interest rates. Italy, which is experiencing the worst hit by COVID 19, is trying to provide relief to consumers and banks to those with a mortgage.
The stock market is not a direct reflection of what will happen with the property market.
Don’t rush to make important decisions
There is a tendency to panic in the current health crisis. Some people will end up selling their property at the wrong time and others will invest in unworthy ventures due to FOMO . Those who are afraid of the pandemic may end up making critical mistakes in the real estate market. Craig Greer-Smith, a buyers agent in Brisbane, says that those who make decisions based on inaccurate data could suffer significant losses.
It is critical not to make panic decisions when the market is at its bottom. You need to take a lot of things into consideration before deciding whether to buy or dispose of a property. If you want to sell your property, it is essential to investigate where you will rent when you dispose of your property. Also, it is critical to think if you will want to repurchase the property. If you make the repurchasing decision after the pandemic, the price of your property might be higher, and you may not afford it.
There is a probability of some astute buying by investors
If an investor has owned a property for a considerable amount of time, it should be generating decent income. Such an investor, despite the current hardships in the economy, should not see the need to liquidate the asset. It actually may be an opportunity to use your equity and buy another property.
Interest rates are lower
The cost of borrowing with interest rates is now lower than ever. It means it may spell opportunity for potential buyers with cash as they can access loans at reduced prices.
There is a tendency to panic in the current health crisis. Some people will end up selling their property at the wrong time and others will invest in unworthy ventures due to FOMO . Those who are afraid of the pandemic may end up making critical mistakes in the real estate market. Craig Greer-Smith, a buyers agent in Brisbane, says that those who make decisions based on inaccurate data could suffer significant losses.
It is critical not to make panic decisions when the market is at its bottom. You need to take a lot of things into consideration before deciding whether to buy or dispose of a property. If you want to sell your property, it is essential to investigate where you will rent when you dispose of your property. Also, it is critical to think if you will want to repurchase the property. If you make the repurchasing decision after the pandemic, the price of your property might be higher, and you may not afford it.
There is a probability of some astute buying by investors
If an investor has owned a property for a considerable amount of time, it should be generating decent income. Such an investor, despite the current hardships in the economy, should not see the need to liquidate the asset. It actually may be an opportunity to use your equity and buy another property.
Interest rates are lower
The cost of borrowing with interest rates is now lower than ever. It means it may spell opportunity for potential buyers with cash as they can access loans at reduced prices.
Record low interest rates could provide great buying opportunity.
Reduction in the supply
Due to the pandemic, there is an increase in cancellation of auctions. This dynamic is yet to still fully play out with property prices. Though our primary focus at the current situation should be on our health, it is unwise to ignore the post-pandemic effects. Our current real estate market is a bit pale, but when the pandemic is over, we can predict an increase in demand and supply.
Real estate sales are still being made
Despite the effect of the pandemic, the real estate market is still recording transactions. Although, the recent sales have recorded selling prices that are a bit lower than the market price. The bidders of the property in specific auctions were limited so it is too early to tell.
Due to the pandemic, there is an increase in cancellation of auctions. This dynamic is yet to still fully play out with property prices. Though our primary focus at the current situation should be on our health, it is unwise to ignore the post-pandemic effects. Our current real estate market is a bit pale, but when the pandemic is over, we can predict an increase in demand and supply.
Real estate sales are still being made
Despite the effect of the pandemic, the real estate market is still recording transactions. Although, the recent sales have recorded selling prices that are a bit lower than the market price. The bidders of the property in specific auctions were limited so it is too early to tell.
