Strong & Sharp Housing Rebound Tipped Post COVID19
Many confident property market forecasts have been shared this week, giving reassurance to confused property investors. One example came through LaTrobe Financial, tipping the Australian property market, employment conditions, and economy will rebound strongly when the COVID-19 outbreak comes under control.
LaTrobe Chief Investment Officer, Chris Andrews, highlighting his confidence in the long-proven ability of the Australian economy to bounce back once the immediate threat has passed, drawing comparisons to the immense resilience previously seen in the Australian housing market. Andrews noted periods in the past when broader global economic conditions such as the Global Financial Crisis (GFC) in 2008 and the 2017-2019 "credit squeeze" sent shock waves of fear through the national property markets, but recovered strongly soon after.
"In both cases, there was an initial drop...but in both cases, that was followed by a sharp rebound, as more normal conditions re-emerged,"
"So, that is a really good baseline for our thinking around house prices."
LaTrobe Chief Investment Officer, Chris Andrews
LaTrobe drew confidence from the fact that house prices are less volatile than the share market, and that our financial system is robust, and they are not on their own. A growing number of leading property industry experts are standing up, and boldly forecasting a strong recovery is our most likely outcome when this virus is contained.
Propertyology’s head of research and REIA hall of famer, Simon Pressley, was quick to show his confidence in the national market:
"Just as it did with any past crisis, the adverse economic impact from this coronavirus health crisis will begin its rebound with a real estate surge before anything else.
Safe as houses!"
But what happens if unemployment hits 10%?
Doom and gloom forecasts quickly circulated when unemployment was tipped to climb as high as 10% before the government stepped in and delivered record-breaking stimulus packages including the 'Job Keeper' initiative. While this may assist in helping Australia reduce a rapidly climbing unemployment disaster, nobody can deny that the underlying problem revolves around how long it will take for our business sectors to recover fully and employment levels return to pre-crisis levels.
Simmon Pressley also drew comparisons to Australia's last recession, 29 years ago. During this period, with unemployment rates hovering around 10%, Australia's property market led the rebound to our economy. Over the first three years during this period, every capital city in Australia produced up to 27% capital growth, and in many cases, our regional markets were even more robust!
Media is overlooking the positives and regurgitating negativity!
Another recognised industry expert and regular property commentator, Terry Ryder, pointed out this week his frustration around the unsubstantiated doom and gloom media headlines that are sending unnecessary fear through segments of the national property market. Terry took aim at the relentless, hardline negativity displayed by poorly informed Journalists. Terry said
"The relentless, hardline negativity of the coverage has been breathtaking to behold. Journalists have focused on every negative event or statistic with barely concealed glee and ignored the positives. There’s been a stark absence of balance."
Terry even pointed out the worst offenders, targeting the negativity published by Fairfax newspapers, headed by the Australian Financial Review, as one of the worst offenders who regularly tend to regard real estate as something to be attacked rather than reported. Terry lashed out in frustration, saying -
"We all know the analogy about those who see the glass half full and those who perceive it as half empty. There’s a third category for Fairfax journalists – those who see the glass as completely empty."
Like all other independent, highly respected Australian property market analysts, Terry also pointed out that he was not kidding himself that real estate was immune to a virus-induced downturn and that some markets could take a hit. Still, he expects any downturn to be short-term with a notable recovery to follow soon after.
The Best Defense Is
A Good Offense
In these ever-changing times, property investors need to stay
up to date on how COVID-19 could be impacting the value of their investments and impacting your income.
SEQ Big Shift Report
- OUT SOON!
Keep an eye out for my upcoming SEQ Big Shift report where I'll break down a number of key elements that are creating a 'perfect storm' for informed property investors in certain postcodes within the emerging hot spot for property investors.