COVID-19 (CORONAVIRUS) impact on the Australia’s Property Market and Your Future
Updated: Apr 21, 2020
COVID-19 has increased downside risk for the economy as a whole!
Yes, the spread of coronavirus for the past few weeks have seen increased expectations of an Australian recession, a slowdown in business activity and trillions of dollars wiped off global share markets. Even the small business owners are affected by this crisis. That is why, many people ask, what is the impact of the coronavirus would be on Australian residential property? And how this pandemic crisis affects the future?
Most of the people think that Covid 19 will totally crash our property market. Although we're not really sure what will happen, we have reasons to believe that Covid 19 has no great impact on the property market. Why? Firstly, we may say some banks are still allowing mortgage relief, such as: offering new low fixed rate home loans or refinancing, extending out the mortgage term without penalty. Secondly, some Investors opting to invest into the property market, which is less volatile than the share market and thirdly, we may say the value of Australian dollar is low compared to others, meaning our properties are now more affordable or even accessible to those from overseas. In this case it will allow them to consider the Australian properties.
On the other hand, we have some reasons also to believe that the impact on value is still unclear. Why do we say so? Firstly, housing has performed relatively well against negative economic shocks, but the unique conditions of a pandemic-induced economic slowdown and secondly, housing is an illiquid asset and a consumption good, which shows far less volatility and decline than share markets.
Some will say, because of the pandemic, property value will be negative - prices will go down. Truly, we have the reason to believe in this because we can see the actual effect on global marketing. If that is the case, from a property market perspective, for those ready to buy, more than ever now is the best time, especially with record low cash rate, lenient lending, and many banks offering great deals. Yes, for property investors, this could present an opportunity to buy a property or to refinance.
We are still hoping that the pandemic will end soon and will go back in normal. But we should have in mind that we have a great story around property demand, the construction, the supply and all the things that keep our economy moving strongly. Australia always looks like a great place to live.
Yes, we cannot predict what will exactly happen in the future, for the next day, next month or next year. Our future has not been written down in advance but is shaped by the present, on what you are doing. And if you are preparing now, take the great chance to buy a property or to refinance, you may feel more freedom and security. As one noted inventor observed: “We should all be concerned about the future because we will have to spend the rest of our lives there.” Your future depends on how you view it and plan for it. It also includes how you use that time, the plans you have made, the goals you have set. But don't make it still on plan, take the needed action to direct your steps toward that goal.
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