This is hands down THE biggest question in real estate since the pandemic began bringing uncertainty about absolutely everything, including house prices. Let’s hear what the experts have to say.
In mid-May, ABC News talked to a range of housing experts. Emma Baker, Professor of Housing Research at the University of Adelaide noted that sales prices had held up reasonably well but acknowledged that the negative impact of the coronavirus on jobs and the economy was bound to impact prices. CoreLogic Head of Research, Eliza Owen, predicted that, over the next year or two, we can expect a price drop – but this will be less than 10% nationally. Professor Steven Rowley of Curtin University’s School of Economics, Finance and Property added that, despite uncertainty, if you are in a stable job with good income, there is no reason not to look around for a good housing deal. And SQM Research’s Louis Christopher pointed out that what happens in the market will very much depend on what happens with the virus over the coming months.
In his Property Update for June, one of Australia’s leading property investment advisers, Michael Yardney of Metropole Property Strategists, chatted to Dr Andrew Wilson, Chief Economist at My Housing Market. They noted that, while recession is inevitable, there are some positive signs in our property markets as Australia eases out of lockdown and relaxes restrictions.
Key points that may set home buyers and investors at ease include
- People will always need to keep selling and buying in all markets
- After falling in April to May, the number of property transactions have started to pick up and should continue improving
- With lockdown restrictions easing, consumer confidence is up for the 9th week in a row
- The Government is investing in a big way in housing stimulus to keep the property market boyant
- Interest rates are at historic lows – mostly in the 2’s – and most chief economists and experts predict they won’t be going up for years and years
- Unlike shares, property is not a liquid asset and, unlike shares, cannot bought and sold in a phone call. It is far more stable
- The Corelogic home value index, covering major capital cities, declined only 0.5% in May
- Many industries are actually thriving from the health crisis and many people still have secure jobs at this time
- The ‘cliff edge’ talked about in September when subsidies end may not be as severe as first predicted.
Ultimately, nobody has a crystal ball or rings the bell at the top or bottom of the market.
Experts say the right time to buy is when you have the financial capacity and job stability to take on debt – and everyone’s situation is different. Some will want to buy and sell right now to take advantage of the low interest rates, and that’s ok with a stable job and good income. Others will prefer to hold off during times of uncertainty, and that’s ok too. Either way, keep yourself up-to-date with the latest information.
So, if you have weighed up the pros and cons and are thinking about selling, see our latest blog, Five tips on how to sell your home during coronavirus for the latest tips and tricks to help you maximise your return.