ExecutiveChronicles.com | How has COVID-19 influenced the Australian Property Valuation Market? | With the world facing one of the most massive economic contractions, it has also influenced Australia’s property market. Read this article to know the overall impact of Covid-19 on the Australian Property Valuation Market.
The Covid-19 pandemic has slowed down the fast-paced world, impacting every aspect of humankind. Many countries of the world had to completely shut down their daily activities to control the situation, one of them being Australia.
With timely measures, Australia has managed the situation and is clearly winning in terms of controlling the fatality rate. However, there is still one battle left to be beaten – the economic sector.
The lockdown restrictions and pandemic stricken economic environment have affected all the economy’s sectors and markets, with the residential Property Valuation Sydney Market being no exception.
In these testing times, it is essential to keep track of the housing market, as it is one of the primary sources of income for households in Australia.
In support of the government’s steps to protect jobs and incomes, banks have halted mortgage repayments, landlords have shelved rents, and there’s a temporary eviction moratorium.
But with restrictions beginning to lift, things have started to go back to normal.
So, the question is, what is the pandemic expected to mean for property prices and values in the upcoming times?
Slower to Respond
The Covid-19 pandemic has lead to one of the most extensive global economic inconsistencies. Due to this, the financial markets have immediately re-priced the securities and bonds.
Comparatively, house prices take a longer time to react to whatever is happening in the economy because of various reasons.
Properties are more than mere investment for people. They differ from one another, making them harder to be bought and sold compared to stocks and bonds.
However, this also means that property prices are easier to predict than other assets. Besides, the stock price changes can also be useful to indicate the upcoming changes in the property values.
Managed at keeping a steady course
In May 2020, one month into the lockdown, the predictions about the property market were very distressing. A Commonwealth Bank forecast proclaimed that the house prices would crash by up to 32 % because of the pandemic.
While the concerns persist regarding the damage done to the economy, the property market’s performance has surprised the alarmists.
The CoreLogic House Value Index shows that the Australian property market is holding steady despite the restrictions and fear of COVID-19.
Consistent traffic on property market websites
The statistics show that there has been a decrease in the sale, but the volume of traffic to the real estate websites is consistent, which implies that the buyers are circling to buy.
The sales have undoubtedly been affected as the sellers cannot show their properties because of the restrictions. But there is always a need to buy a property, and thus the properties will eventually sell.
Now, as the restrictions are lifted, there will be a quick increase in sales and rentals.
Doomsayers believe that the market has not entirely reacted yet. The next few months might be steady, but there will be a plunge once the JobKeeper and other relief packages are lifted.
Unemployment will undoubtedly affect the property market, and there may be many forced house sales.
Substantially, what happens next depends on whether the relief packages are extended or not and if the banks continue the mortgage holiday for a more extended period.
Rentals in shops are low because of the lockdown, but they are gradually recovering.
The residential rentals have also been adversely affected as there are no tourists to rent.
However, as people cannot travel due to current restrictions, tenants are looking for properties in popular holiday destinations. Moreover, there are people in their 60s with money buying properties in these destinations to stay safe and secure.
All in all, the COVID-19 pandemic has caused minimal descriptions, but the market has not been as much affected as the alarmists anticipated it to be. While few analysts believe that the market will plunge after the relief packages are lifted, some think that if the situations continue to be as they are now, the market will be under control in a few months.