The impact of the new crown epidemic on the whole world is extremely wide, from people's physical and mental health, to employment and economic,, to market sentiment —— its impact is unprecedented. At the moment, most people who believe that they live in Australia are thinking about it to varying degrees: How will the new crown outbreak affect me? Including my job, my lifestyle, and the biggest deal of my life ——real estate?. Within the Ironfish Asia Pacific Group, our internal research team has been closely monitoring the movements of real estate markets, and recently we have been particularly concerned about the direct impact of daily changes in the epidemic on economic situations and market sentiment, and the response of real estate markets to these effects. The current economic situation and the job market make the short-term trend of the real estate market difficult to predict. Across Australia, real estate buyers' purchase intentions and trading activity have declined. And this situation, just before the 2019 federal election, the Australian housing market —— especially in Sydney and Melbourne. At that time, because of political uncertainty, a large number of buyers and sellers held a wait-and-see attitude, real estate trading volume declined, buyer activity decreased, purchase competition was also very low, by the date of the election, house prices have been falling for several months in a row. Once the election results were announced, however, certainty returned to the market, plus the benefits of the federal reserve rate cut and the australian prudential authority (APRA) relaxed lending capacity measures, and almost overnight the market began to turn up —— sydney and melbourne witnessed a historic rebound and rise in volume and house prices. At this point, at the end of March 2020, a new game of "wait-and-see games" began in the market, and buyers and sellers entered another waiting period. So... How long are we waiting? As we may recall, Wuhan, the world's first city to be sealed by the epidemic ,—— a comprehensive blockade on 23 January. Twelve weeks later, on april 8th, wuhan is expected to be fully unsealed and re-established as a vibrant, bustling city. So how long will Australian cities be blocked? While it is difficult to determine at this point in time, we can compare Hubei Province and Australia as a whole horizontally: a total of 494 cases were diagnosed in Hubei Province on January 29—— that is ,6 days later, reaching 4,334 cases, with a cumulative total of more than 67,800 cases as of today diagnosed in Australia on March 17, and a total of 4,093 cases were diagnosed in Australia as of 6 a.m. today, that is ,13 days later. It is not difficult to see that, compared with Hubei, Australia's new case curve is smoother and confirmed cases are growing more slowly. With the escalation of preventive measures across Australia and the significant decline in people's out-of-town activities, it is likely that Australia will not be as closed as Wuhan in the current situation. Are real estate markets going to crash? The housing market has been of particular concern to Australians in the economic sector, and for the moment many may be wondering what the worst could happen to the real estate market. At such a special time, it is no surprise that there is a bloody "doomsday theory" in the media, and many people who hold real estate are affected by it and panicked. But while house prices may experience a temporary decline in the short term, remember that we are likely to see that only those who have to sell will choose to do so now. This phenomenon is caused by the following major reasons: The current cash rate is at an all-time low. At the National Bank of Australia (NAB) today, you can use a rate of 59% for three-year fixed-rate investment mortgages, and many investment houses can return 4%, or even 5%-5.5%, and in some urban areas more than 6%. As a result, it is very easy to hold a real estate in today's market, which means that sellers do not have to rush to sell in this special period. Some landlords may face a temporary decline in their own or tenant's income, and repayment is affected. But a number of banks are already considering a number of measures to counter the situation, such as suspending mortgage payments for months for lenders with economic difficulties caused by the outbreak. Moreover, the government economic stimulus package is designed to minimize the occurrence of this situation, as will be explained later. A large number of investors are withdrawing money from volatile stock markets, for which the stability and high returns of residential real estate are more attractive than keeping money in banks. Behind the housing market there is always a solid and real demand —— people always need a place to live. Market demand for housing is long-standing. real estate, for the vast majority of Australians holding real estate, is often their number one asset and the one they will definitely try to keep. For more information about Australian real estate, please click the link below to subscribe.
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