One question that has been commonly searched since the beginning of the COVID-19 and the coronavirus outbreak is how the price of houses will be affected. Have it in mind that it will be negative – there’ll be a decline in the prices. Up till today, individuals have been talking about the development of a big momentum in the property market with the 2021 interest cuts and the credit conditions easing. Rates were cut by the Reserve Bank soon after the developing COVID-19 outbreak news broke. That alone is positive for the property market (which means the price goes up or stabilizes.)
I totally expect a solid rebound this year but it will hurt in the short period. We’ve got some economic sectors where individuals will stick to their jobs and we can fairly say that uncertainty is being generated broadly by COVID-19 in the community and also the economy. For several individuals who have wealth in the share market, there’s been a diminishing in their wealth. So there’s been a reduction in the capacity of several individuals to make use of the wealth to buy into the housing industry.
I’d like to buy, what am I required to know?
Buyers that have highly secure jobs in this area are in a more improved position due to the fact that there’s a weak overall market. COVID-19 will get rid of some kind of buyers – those who adopt the wait-and-see approach or those that are just unable to purchase because of reduced income. But we have one other group of buyers: the ones who have jobs but have the uncertainty of the effect of coronavirus on their pay, if they’ll even keep their job.
I’d like to sell, what am I required to know?
If you are a seller, you’re required to know that things will become weaker. The proposed sellers having flexibility will have the ability to defer and that could prevent a fall in prices. There’ll still be individuals that need to sell for some particular reason. There’ll be a decline in turnover, but there’ll still be properties being unveiled in the market.
I’m an investor in properties, what am I required to know?
It’s been more difficult in the market for investors. For example, the market in Sydney is currently oversupplied and there has already been a kind of downward pressure on the prices of rentals. Of course, investors can kind of take advantage of the rates decline but declining rents will offset that benefit. Then, there comes the COVID-19. It’s causing a weakness in the economy that will accentuate the decline in pressure on rentals in a short term and that is something that investors are required to be cognizant of.
A 2021 Rebound
2020 was a difficult year for the economy in several ways. Talking about the growth in recession and even though the top firms will likely not dismiss lots of individuals, several small businesses will face the prospect of low or no income. They’ll likely have no other option. There’s going to be a harsh effect on the financial capacity of medium and small-sized businesses. If you are a restaurant owner and there isn’t any customer, you’ll likely have no choice but to close or reduce staff. There’s a good target of the stimulus package, but there isn’t any stimulus package worldwide that will prevent a couple of these effects from happening.