There is much speculation in the current press and the impact of this current Corona virus and what effect it will have on property prices and the real estate market in general.
I don’t profess to be a property market analyst nor do I have any formal qualifications that would attest to a professional opinion. But what I do have is a network of agents across the country that give me real time feedback into the experiences that they are having and have had with COVID 19 impact on their property business’s.
I nearly choked on my chicken schnitzel the other night when Channel 9 wheeled out an “expert” telling us property prices were set to fall between 10-15% and a Commonwealth bank expert was quoting as high as 30%. I flicked to Channel 7 and there was the REA Group financial analyst flouting a very smooth cruise once we set sail for a life after COVID. Speculation everywhere…and at very different ends of the spectrum mind you.
The “expert” was resolute that unemployment was set to hit 12- 15% and our real estate market was set to crash in all major capitals with Sydney to be hit the hardest. I think the answer rests with the way the people want to react after COVID 19…after all…the people make up the market place.
Word on the street is that sales and listings have been slow (obviously). Vendors are not keen to list a property now when prospective buyers either a) can’t get through or are b) reluctant to venture out into small groups of unknown people. “Stay away” was the cry…and that is exactly what Aussies did.
But what was the market doing prior to Corona.? Well…it was actually building nicely from the downturn of the 16-17-18 property boom…the one that looked like it would never end. Markets across Australia were recovering slowly but steadily, confidence was returning, money from the banks was flowing again and….. all in all…it looked like a return to what we would call “normal” market conditions. I saw it through the training business as well. 2019 was a shocker, there was more “firing” than “hiring” and we could count on one hand the number of students attending class who had been offered a job in a real estate office.
But that all changed toward the end of 2019. People were returning, class numbers were growing, the agents were becoming more confident and this carried over into early 2020. Agents were starting to smile again. The happiness was short lived though. Enter CORONA …Exit MARKET RECOVERY….at least for the medium term one would think.
There is no doubt we will approach business differently after the lessons learned in the past few months…..but Aussies are a resilient lot. They believe in property and love the idea of home ownership. The share market has taken a battering in just a few short months and typically we run back to the security of “bricks and mortar” in uncertain economic times. How many of us are skilled enough to play with Art, Collectible cars, options, currency trading and other forms of speculative investment.? Not many….the majority of us know and understand that “your home is your castle” and you will fight tooth and nail to keep it.
Those that have lost jobs and who will not return to employment are the economy’s biggest concern. These are the ones that are at most risk of losing their homes and this point, if anything, will have the biggest impact on housing prices going forward. The banks have been fair in giving us all a “mortgage holiday” if needed. However, I don’t see this number as being significant although this is yet to play out.
So, my confidence rests with the homeowners and potential home owners of Australia as our economy wakes up from it’s COVID hangover. There is no doubt that we face a rocky recovery ahead…Property Boom….certainly not…Property Bust…a long way off. If anything, COVID 19 has “kicked the can” for the next property boom a little further down the road.
Final word. Just remember it was the “experts” who had also written off the Liberal party in last year’s elections with Bill Shorten odds on favourite to become our new PM in an “unlosable” contest.