Whats the property market up to now?
The COVID-19 pandemic has seen many businesses affected, including real estate. Despite inspection procedures being modified to conform to the government's separation and social distancing steps, and some tenants and renters experiencing financial distress, it is a difficult period for families, understandably. When we step to the other side of COVID-19 it is top of mind for property owners and investors how the property market performs.
Depending on what you hear, some economists think we might see an 11% fall in real estate prices across Australia. Some more bearish forecasts foresee house prices dropping by 32 per cent. Rather than getting too connected into the media hype about the potential for a decline in house prices, it is more liberating to understand what will drive real estate prices in Australia throughout the next couple of years. Below we have used an overview of the key factors that may affect the real estate market in the months and years to come.
Pressing down on rent
With short-stay sites such as Airbnb experiencing a large decline in demand, many of those site assets have entered the rental market. As more stock is available, this puts downward pressure on the rental rates. Vacancy rates have increased in places with large international student populations, also putting pressure on the rental prices.
Conditions in every capital city
As isolation policies intensified all over Australia in March, Australia's rental vacancy rates rose by 0.8 per cent to 2.5 per cent in April. With rental listing increases of 36.2 percent and 34.1 percent respectively, Sydney and Melbourne faced the worst. Hardest hit in these cities were places with high numbers of retail or hospitality staff, foreign students, and other residents from abroad.
Immigration has buoyed Australia's housing market in recent years. In the coming years, the COVID-19 pandemic could see immigration diminishing by around 300,000 people. In those areas, property prices and the rental market may be hardest hit for cities and regions that have typically had a large migrant population.
Ultimately, nobody knows where property prices are going to go, and what kind of policy answer the government might have if we end up in a more bearish scenario. The best way to plan for any circumstance is to ensure that your mortgage suits your condition and can survive a downturn in the economy. Regardless of COVID-19 or other macro incidents, getting this approach to your mortgage at all times will mean that in every situation you don't have to buy into media hysteria.
Note this article is not financial or legal advice. Please check with your financial and legal qualified advisors before taking any decisions on your own.
For further information about real estate in this area, contact No Bull Real Estate, your most reliable and friendly real estate agents in Newcastle & Lake Macquarie. Buying, selling, leasing for residential, commercial, industrial property, contact your local expert to buy, sell or lease today on 49552624 or https://www.nobullrealestate.com.au