How has the Australian property market held up with COVID-19?
There has been uncertainly in previous months around the impact of COVID-19 on the property market. Risk of unemployment, tenants unable to pay rent, and changes to the way we live our daily lives have had an impact on a variety of financial sectors. The property market has not escaped this uncertainty, but there’s some good news for investors looking to keep an eye on the state of property in Australia.
The Commonwealth Bank (CBA) has reported that the expected fall in property prices as a result of the coronavirus pandemic was nowhere near as significant as initially projected. Data was expected to average anywhere between 10-35% nationally during the peak impact of the pandemic. Recent reports have revealed incredibly positive news with actual property price falls as per capital city data averaging at only 6%. Queensland property suffered less of a drop in price than many other capital cities.
What is projected for the Australian property in 2020?
CBA has elaborated further, projecting that this decrease is expected to turn around and bounce back in the months to come. Forecasts are based on assumptions that the pandemic continues to be managed and property prices will rise in line with no further lockdowns and unemployment levels bouncing back. Rental income is set to stabilise again, and the rollout of borders reopening will aid revenue boosts for many industries.
What is driving the increase in property prices?
With mortgage rates continuing to stay low, mortgage applicants are able to apply for larger loan amounts and therefore spend more on property purchases, helping to drive up property prices. Many home owners are also opting for refinancing their existing mortgages, locking in low fixed mortgage rates.
In addition, new first home owners are stepping into the property market and taking advantage of some of the government stimulus packages on offer. All in all, the property market is seeing positive trends predicting a come back for the property market as we move towards the end of the year.
What does this mean for investors?
Investors may decide that now is the ideal time to secure properties before values increase, and take advantage of low interest rates for stronger returns. There has also been a strong trend for residents moving to Queensland from other states, in particular regions of South East QLD. This has the potential to create a combination of a higher demand for rental properties, as well as greater competition for purchasing homes with buyers looking to relocate to the Sunshine State.
Recent Comments