12 months from now

Hi all - can you please share your view on how you believe the residential property market in Australia will look 12 months from now given our current COVID19 situation.

I understand no one has a 'crystal ball' but I am curious to know what factors we should take into account when looking forward the next 1 year (i.e. say, by July 2021).

For example, rental vacancy rates, median prices (for both houses and units), city areas vs regional areas, interest rates, etc.

Finally, what opportunities do you see over the next 12 months, such as getting in to new markets and investing in specific areas that may become particularly affected where bargains can be picked up.

 

There are thousands of residential property markets in Australia. Which one are you referring to?

 

I am referring to all of them and what people generally see occurring in the next 12 months.
For example, will units fall more than houses? Which regions will have the biggest negative price impacts?
It is a general question, I didn't have a specific market in mind.

 

I am thinking about the same.
from the top down, unless an effective vaccine is developed and the G7 population all have it, the earliest date that can happen, if a vaccine can be found, will be early 2022.

if a vaccine cannot be found, international travel will be 99% restricted. Government will do the balancing act of capping death / day vs how much to open to save the economy. in this case unemployment will be high and economic activities will be much lower than pre-covid.

for me, properties having its uniqueness, on a piece of land, bought at a bargin price is what I am looking for. The uniqueness could be the area, location, view, building design etc.
using the equities terms it should be "value at a lower price".

 

My prediction is some will boom some will drop some will stay steady.

 

House prices unlikely to rebound until 2025

The AFR has an article suggesting prices won't rebound for quite a number of years.

"This coronavirus shock is going to be worse than the recessions of the early 80s and 90s and we are still waiting for it to end," Shane Oliver, AMP Capital economist.

"He said the rate of growth was starting to slow at the end of last year, a sign that housing affordability had become stretched once again, but then the market momentum switched off "almost instantly" once COVID-19 hit."

 

Good thoughts - thanks fl360. Must say this all sounds a little scary, given the uncertainty.

 

There will be less money in the community but I think people will put a higher proportion of their money into their property.

So I think maybe only a slight reduction for property. Thinking significant reduction in share market.

 

I would split the property market into OO (capital prices) and IPs (rentals).

You are right, more money will go into property, which will mean less for consumption and hence jobs. (Consumption is 60% of aussie GDP). Generally the demographic effected the most by these job losses are renters - young casual in retail for example.

So as more money goes into housing, and hence more jobs lost, the rental sector is really going to take a big hit. (as we have already seen).

Think falling rents for years and surging vacancy rates. OO should be fine but highly leveraged LL, not as well - unless they can service the loans on their IPs from their own wages.

 

Yep, rental sector will take a big hit. Commercial real estate sector probably does too.

High-yield investment properties probably take a hit as people try sell them in response to rent drop.

This year has really sped up the shift to remote/online workplaces. I think this will see people moving further from the city and eventually moving to naturally beautiful and affordable locations around the coastal regions.

 

I have a shop which I am interested to buy, the land within 500 meters of it has become highrise land, and all the shops around it is all tenanted, even now.

talked to the bank, they have no interest in doing a retail property loan, even backed up by equity in my PPOR.

 

Property market, down 30%
Commercial property down 50%
Rental martet down 25%
Immigration at 0% (hence the above, no "jobs and growth" !)

All on the basis that Victoria's second wave doesn't result in US style statistics where thousands die from Covid-19 each week (or Coved-20-21-22 or 23 ...........)

Lets face it, the results from the NSW Crossroads outbreak have been identified as originating from Vic, but are a different strain to the original outbreak (as stated by ScoMo himself), without a Vaccine things are heading SOUTH.

I should have put my money into the Gold market !

 

It's not all doom and gloom. My Hobart IP suburb is gonna jump 10 median spots at the end of this month.

 

Where the remaining "treated" humans turn into Moderators
Zombies won't be capable of frequenting PC

 

Did Scomo actually state these new infections are a different strain then lets say the Ruby Princess strain?

 

Who knows, given up trying to work it out

Only people who should be concerned are those that can not service back debt


Hint..... cash is king/queen

 

Just looking at commercial working farmland values Australian Farmland Values

A reasonable trend over the last 20 years and soft commodities generally are holding up well. Someone still likes to eat it seems!