The global economy continues to struggle amidst the Covid-19 pandemic. There are still no solid figures determining the full impact of the outbreak on the Australian economy. However, property market experts are still hopeful for a rebound in the property market throughout the current year.
According to CoreLogic Australia’s Head of Research Eliza Owen, Australia’s property market managed to perform “relatively well” in the past against negative economic impacts. “Major share market losses and recession are not necessarily predictors of declines in housing values,” Owen explained.
She made it clear that the effects on the market may vary and that it is important to explore “how property has historically responded” to these issues.
In 1987, the stock market severely and suddenly crashed resulting in a strong economic decline worldwide. In one day, the Australian share market lost nearly 23 per cent of its value that time. Housing values on a better note were not largely affected. By October 1988, the residential property market achieved double-digit growth. Olwen used this as an example in her report suggesting.
Record Low Interest Rates
To cushion the economic blow of the coronavirus outbreak, the Reserve Bank of Australia cut the cash rate down to .25 per cent. The board slashed the rate two times this month in response to the outbreak. According to RBA Governor Philip Lowe, the decision is vital to “support the Australian economy through this challenging period.”
Property Market Rebound
There are no clear data to guarantee a rebound in mid-2020. However, the property market in the country has performed well since late 2019 with record-low interest rates, affordable housing, strong migration and infrastructure investments.
It is way too early to determine the timeline when the rebound will commence and it can either be in the next coming months or by early 2021. It is no surprise the businesses in the country, especially small businesses are taking a big hit. However, people, especially investors are still hopeful that when the virus is contained, things will pick up for the better. Real estate expert Nigel Stapledon from the University of New South Wales business school said “People will recover. People will go back to restaurants. People will go to football games. Things will eventually bounce back.”