“After every global economic crisis, there has been a rise in property prices, and there is no reason to suggest that this worldwide disturbance will be any different, as the underlying fundamentals are still solid."
There is no doubt that COVID-19 will hurt many households and businesses financially, but we do need to remember that like all major global events, there will be a recovery.
As Australia flattens its COVID-19 curve, the discussion is starting about how we get the country back to normal in the coming months.
Tough, courageous decisions lay ahead but one thing is for sure, a healthy property market will be at the top of the post-virus economy wish list.
Nothing drives our economy more than a vibrant real estate sector and confident buyers. And when the turnaround comes, built-up demand will ensure momentum swings back to the sellers in a matter of a few weeks.
If you’re a smart buyer, you’ll have made your move before that happens.
Even in this COVID-19 crisis, the Australian property market is still transacting and there are excellent purchasing opportunities in different markets around the country.
There’s no denying that these are very unusual times. It’s natural to be cautious and concerned and be afraid of the unknown. But, economically, we are in a better position to recover than when the Global Financial Crisis struck us 12 years ago.
Firstly, we know what must happen to end this current crisis. When the GFC struck, there seemed to be no end to the tumult despite governments around the world throwing money at the problem for a decade.
Also, credit is much more secure today than it was back in 2008. Our practices around granting mortgages and secured loans are much stricter, and this has put our economy on a firmer footing.
These practices have curtailed property market growth with the volume of building approvals and residential vacancies dipping in many parts of Australia in the past two years. So, supply generally has been quite tight, frustrating buyers and sellers alike.
However, this tight credit environment has created pent-up demand, and governments will want to unleash this at the right time to stimulate the economy.
After every global economic crisis, there has been a rise in property prices, and there is no reason to suggest that this worldwide disturbance will be any different, as the underlying fundamentals are still solid.
So, right now, smart buyers will:
• Reassess their own financial strategy, finances and goals to capitalise on this unique
environment.
• Ask the real estate agents about properties that offer good value, and vendors who
might be keen to strike a deal.
• Calculate the financial benefits if the property is to be an investment. There’s every
chance you can get a 5% rental yield and a 3% interest expense.
• Make their move while others dither and doom-say over our future.
While the volume of properties on the market is down, but there are still buyers and sellers. Now is a great chance to hunt down a great value property, whether it’s your dream home or an investment property.
The fundamental purpose of housing is shelter (owner-occupiers and renters) that's why we don't see the same volatility that share markets have.
To leave you with a few quotes from one of the world’s greatest investors, Warren Buffett.