IS coronavirus going to cause a property market crash?
This is the question of the moment, and understandably people are concerned - I am hearing buyers are holding back from making purchases, not any of my buyers but I hear this is happening. And I understand there is a level of fear & concern.
If I had casual or contract employment I understand your concern; I have long worried about jobs in Australia - I have been very vocal about the need to bring manufacturing back to Australia and to buy more local and from small producers. This is something I enjoy doing every Saturday morning. Personally I feel jobs are our biggest issue - not interest rates or pandemics.
But one feeds into the other right now.
And while I have no crystal ball my answer to the headline question is, ultimately this is a short term crisis which will resolve & like many others we will recover. In fact anecdotally right now I would say my buyers are looking for more money to spend and not less - they're finding property prices are creeping up with more first home buyers on the ground and investors too. Bums on seats is my favourite phrase when evidencing where property prices are going, there is no better indicator than the people who are on the ground negotiating.
What is it taking to buy a property?
How many people are at the opens you're attending?
How much interest in each property?
These are excellent indicators for the market. Right now these are indicating our market is still buoyant. How this will change in coming weeks and months if we find ourselves in an extended lockdown is a matter to watch, but history shows us that these moments in time usually lead to a strong recovery as we all do need somewhere to live.
I'm not the only one who has this thought either. I observe a very clever property mind, Michael Yardney commenting much the same today in Smart Company he observes the underlying foundations of our market and also the cycles we have seen in the last two decades & their impact.
Interestingly I do subscribe to the theory that we will see a societal change from this episode and I hope for the better. When you think about the empty shelves, the potential lockdown and stocking up, the forced isolation - are you reminded at all of austerity measures of earlier generations? Does it bring to mind reflections of how our grandparents may have endured wars and the depression era? Of course we have it so much easier than they but a little insight? Does it give a little pause to think?
I hope we will see a change in consumerism and perhaps more people working from home (you're all "look at me working from home", it's business as usual over here), cleverly and relieving pressure on some of our transport systems. I hope it will see some clever industries emerge creating more & more stable jobs, and a huge shift in our purchasing choices. Less reliance on a casual/ contract / impermanent workforce. I truly hope we stop selling our prime land off to foreign buyers and create trade deals which favour Australian manufacturing - but this will also take us paying a fair price for an item in order to pay a fair wage to an Australian.
In the mean time, I hope we all stay well, stay kind and look after each other.