Despite the best efforts from the Australian government, the impacts of coronavirus have officially landed our shores. As financial institutions preparing to stabilize the global economy in case of a destructive pandemic, is the real estate market of Australia being all doom and gloom?
Expect fluctuations in recent months
It is not unreasonable to predict that most of the focus in the next few months will be fighting against the deadly virus. The auction clearance rate is expected to go down in the recent months while there could be some opportunists trying to cap a deal in the quieter market condition.
But the actual situation will be hugely reliant on the actions by the Australian government, especially on travel bans. Travel bans obviously reduce the number of travelers coming to Australia for both travel and business reasons that negatively impacts our economy. But bans will be keeping more Australians healthy for better growth after the pandemic.
The government might also consider removing travel bans but require self-isolation for all international arrivals. This might seem to be a better choice. Yet, this brings more burden on our health system for slower growth in the aftermath.
Any policy from the government will not deter the global economic downturn brought by the virus. One of the most influential parts of this pandemic is the wreckage of the global supply chain. Until a stable & operational supply chain is resumed, the global economy shall wait for a change.
The same applies to the real estate market. The gloomy society and the general economic downturn would not be particularly encouraging on property sales. Therefore, the clearance rate is likely to drop as the pandemic spreads across Australia.
Outlook to the aftermath
The global economy is looking towards a reset after the pandemic. Notably, many will be looking towards migration opportunities. The increased migration numbers will very likely to encourage a more exciting market.
As the economy regrows, the real estate market will be looking for more prosperous growth. The stock market is, generally, neglected by millennials as they fear the volatility of stock towards their savings. More millennials are prone to invest in the real estate market for the physicality of properties.
The mixture of economic growth, migration and millennials entering the real estate market is likely to aid the growth of the real estate market after the pandemic.
More international capital transfer is also expected with the pandemic and global political instability, which could lead more capital to Australia and support our real estate market.
First-time buyers should also be preparing for government measures to encourage more buyers entering the real estate market.
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