The coronavirus (COVID-19) outbreak has rattled the global investment markets and is having a significant economic impact worldwide. The uncertainty surrounding the coronavirus is affecting consumer confidence and business in general.
In short, to infect, the virus must enter our body through openings like our mouth, nose or eyes. The virus does not remain airborne, and it is carried in small droplets of fluid. Avoid touching surfaces that other people may have touched, sneezed or coughed on as they may be infected and may not yet know. To prevent the spread of the virus practise good hygiene. Wash your hands with soap regularly, sanitise often and do not touch your face before doing so.
Based on what we know the virus is set to spread exponentially and we are told that a large percentage of us will come in contact with the virus. Most people infected will only suffer cold and flu like symptoms but sadly it can be fatal with the elderly and people with certain underlying health conditions or weakened immune systems.
From a property timeline perspective, a virus that affects the economy for two to six months will come and go in a short time frame just like many other viruses have in the past – SARS, the swine flu, the bird flu.
The short-term effect on property is that some consumers will become less confident and sit on the sidelines waiting for things to become clearer.
Buyers should take advantage of any short-term downturn.
In a few years from now this virus would have had no influence where the property market will end up because the underlying fundamentals supporting the property market have not changed.
Interest rates are the lowest in our history and could go even lower. The low interest rates are making it easier to own a home. In fact, it is currently cheaper to be paying off a mortgage than it is to be paying rent.
Australia’s population is growing at the rate of around 350,000 people a year. This means we need about 170,000 new dwellings each year to house all these people.
We have a declining housing supply which will lead to an undersupply of well-located properties in our cities.
Many businesses will suffer, particularly those in the tourism and hospitality industry. The government has promised a number of stimulus packages to assist business but sadly I believe some will not survive. This will lead to a temporary rise in unemployment. But once this is over, and it will be, governments worldwide will ramp up their spending, like we’ve never seen before, to get the economy going again, and this will create new job opportunities.
The economy is facing enormous challenges. The share market volatility has many running scared, but the property market is underpinned by about 70% of property owners who are there for the long term.
The share market volatility will, if anything, make investors look at real estate as an alternative secure investment avenue. Historically, real estate has always performed well over the long term, especially following a stock market collapse.
Take advantage of the uncertainty in the market by buying now while there are fewer buyers competing.
In the words of Warren Buffet “Be fearful when others are greedy and be greedy when others are fearful”, because this too shall pass and you will be disappointed if you did not act now.
Our Smart Sale commitment to Health and Safety
In response to the growing concerns around the spread of coronavirus, Hudson Bond has implemented the highest standards of health and hygiene practices and together with our Smart Sale process of selling we would like to highlight that inspection of properties are by appointment only, one on one. Inspection by appointment is what we specialise in and have been selling houses this way for many years.
We will not conduct an open house or a public auction where sellers have little control over who walks in their home and buyers’ risk being contaminated by rubbing shoulders with strangers that have wandered in off the street.
For everyone’s health and safety we will avoid shaking hands during this testing times (I’m sure you will understand) and have sanitisers for use before each inspection.
Hudson Bond look forward to helping you buy your next home in the safest way possible, by one on one inspections. Homeowners, rest assured we will sell your property with minimum risk by controlling who inspects your property, with qualified cashed up buyers, enabling you to move forward with your life.