Australian real estate benefiting from Covid?

Discussion in 'Property Market Economics' started by spludgey, 11th May, 2020.

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  1. spludgey

    spludgey Well-Known Member

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    Now this is a strange premise, I know, but hear me out.

    In the short term, property prices will undoubtedly take a hit in Australia. However, if we're successful in eradicating Covid here, will this then make it more enticing to others overseas? Australia is not nearly being hit as hard as the majority of western countries. In other countries, Covid might well linger for years to come (hopefully not here).
    If you were an American billionaire currently in NY, where would you want to live?

    Might well be wishful thinking, but I think there's a chance that Australia might become a more desirable place due to its low Covid 19 load, reasonably good health system as well as other livability factors.
    Obviously this is only relevant to people that are somewhat wealthy, but if the market was to shift in the upper segment, it would ripple through to the lower ends too.
     
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  2. Melbourne_guy

    Melbourne_guy Well-Known Member

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    That's a $64000 question. In an unprecedented environment, nothing is known and anything is possible.
     
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  3. Buynow

    Buynow Well-Known Member

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    If we basically eliminate it here, then the borders will remain substantially closed as it would be political suicide for whichever party opened them. So I don’t see how foreigners can move here.

    Also, some other countries may obtain effective herd immunity as it goes through the population. Once that occurs, the problem becomes significantly less in that country and it can open its borders. If Australia remains closed it is less attractive.
     
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  4. Biggbird

    Biggbird Well-Known Member

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    One of the concerns my wife has is that the increased acceptability of working from home will lead to more people moving to Tassie for lifestyle reasons. Lack of jobs has long been a deterrent, but will be less so if one can work from anywhere. Personally don't think it will have a huge effect. I hope not anyway, we like Tassie small!
     
  5. Jezzah

    Jezzah Well-Known Member

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    Exactly this. We cannot allow this virus to be imported again. We have strong biosecurity laws that aim to protect our industries and environment from foreign pests. Unfortunately the COVID falls into this category and likely will mean international travel (temporary or otherwise) is out of the question for a long time.
     
  6. Waterboy

    Waterboy Well-Known Member

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    ^Or we could quarantine them in TAS for 1 month before allowing them into the mainland.

    TAS property market will experience a boom!
     
  7. K974

    K974 Well-Known Member

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    doubt it , we’d all prefer the safety of that
    But the country will have to open up , just today we had a Our part on a major job cancelled $100m+ Project and the overseas company can’t get people in
    Borders will open with 14 day quarantine sooner than we expect I reckon county can’t survive in total isolation

    tourism will still effectively be dead as few will come with 14 days hotel on top but we have to open to business and Long tent arrivals

    testing before travel and self funded 14 day hotel stays will be required
     
    Last edited: 12th May, 2020
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  8. Someguy

    Someguy Well-Known Member

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    Exactly how I see it playing out, in a matter of months I believe we will have open borders. Long term arrivals mostly workers students will arrive and pay for their own quarantine. If someone is planning to stay long term 2 weeks in quarantine will not be an issue for them.

    The only worry I see is exempt people like politicians and diplomats who by the nature of their roles will do more travel than the average person and be of high risk of bringing the virus in.

    Business travel will be dead for most and the idea of travel being a job perk is gone for now but I believe parts of the private sector will push for exemptions from mandatory quarantine and offer self managed alternatives.
     
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  9. LibGS

    LibGS Well-Known Member

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    Surely a COVID test and quarantine while waiting for results fixes that.
     
  10. Jezzah

    Jezzah Well-Known Member

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    Good point, I hadn't considered long term arrivals. However the appetite for such a move is likely greatly reduced.

    Politicians and business people were the most identifiable incidents of transmission early on. Remember Iran and the medical conferences in the beginning?
     
  11. albanga

    albanga Well-Known Member

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    I would say zero chance.
    Let’s even assume the rest of the World stays infected for years whilst Aussie has no cases. And let’s assume they open our borders to overseas people to come live (both of these by the way are almost certainly not going to happen).

    Now let’s assume that wealthy people want to leave their counties and leave behind their businesses that have made them wealthy (again this would be maybe the tiniest portion).

    It would take an enormous amount and it would need to be done around the same time to have a impact on prices as their would be a big demand increase.

    So maybe not zero chance but All of these occurring I would say is probably a 0.0005% chance.
     
  12. Illusivedreams

    Illusivedreams Well-Known Member

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    I actually think something interesting will happen,
    Local demand will sky rocket.
    Towns that have suffered due to lack of Tourism will have local tourism,
    Have a client in Karratha who said it was a huge tourism location prior to the Overseas travel boom over the last 10 years.

    The Perth crown might start travelling their? Or Sydney crown spending money in the id north coast and so on.

    It will be interesting how this plays out.
     
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  13. albanga

    albanga Well-Known Member

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    Definitely think whilst they are hurting badly now that your right and local tourism at the end of all this may be better off.

    How do you believe this will relate to increase in property prices though?
     
  14. K974

    K974 Well-Known Member

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    i see little impact to property in australia and certaintly nothing that will outweight the reduciton in migration etc

    but i dont see your scenario of indefinite border closurers either, the country cant and wont survive in total isolation, pre and post travelling testing and expensive self funded 14 day hotel /government ran quaratine will be in place to allow long term and business arrivals.
     
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  15. Illusivedreams

    Illusivedreams Well-Known Member

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    Darwin, Ballart, Karratha, Port Macquarie, Coffs Harbour, Ballina, Noosa, Port Douglas, Cairns, Areas along the great ocean road........

    May? see a huge increase in Domestic tourism,

    With increased demand will come increased price. Especially in the holiday rental space.. This may have a positive impact on commercial space in this area as well.


    Im not sure if it will happen but if international travel is closed. I think this is plausible scenario.
     
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  16. albanga

    albanga Well-Known Member

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    Nah I didn’t mean indefinitely. I mean for the foreseeable future (e.g next 12 months).
     
  17. K974

    K974 Well-Known Member

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    yes maybe you are correct, nevertheless i cant see any positive impact on property prices in the near future as attractive as Australia maybe it wont outweigh the drop in migration and dont believe domestic tourism will offset the lack on international tourism not to mention domestic toursim itself will be subuded in a time of 10%+ unemployment

    over a longer term Australia will undoublty feel some benifit from its attractiveness as a place to live
     
  18. John_BridgeToBricks

    John_BridgeToBricks Buyer's Agent

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    No one has mentioned the impact of Covid19 on interest rates. This is the main reason why Covid will drive higher prices in real estate. Yes, there is the safe haven aspect, but the money printing has been off the charts. Yes, explosive growth in real estate once this is over.
     
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  19. albanga

    albanga Well-Known Member

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    I know as a BA your job requires you to always be bullish on property...but “explosive growth”. Huge Call!!

    I just cannot see it.
    No matter how I try to put a positive spin on it the other argument is too strong.

    Low Interest Rates < Fear and people not wanting to over capatilise.

    Increased Capacity < Changes to lending policy on essential services, self-employed, generally now harder to obtain finance.

    Pent up Demand < Forced sellers when we return to “normal” causing oversupply.

    These were initially my main arguments for property but I just don’t see them stacking up. Then we have all the negatives on top of that. E.g unemployment and the biggest of them all “sentiment”.

    Everyone that knows me around here knows I’m a massive optimist. When this all started I thought no biggie and argued these points. But for once the glass on property is half empty...Sad Really.
     
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  20. willair

    willair Well-Known Member Premium Member

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