Will Property Really Plummet?

We will eventually be OK, but its how long will it take? In the meantime will impact on gdp

Its the industries where there is no coming back?? Which has a ripple effect on other industries

travel, tourism, hospitality industry /airbnb, education, entertainment industry, gyms, building industry

Restaurants wont just open at 100% capacity

i think psyche of average person may also change??

I think major banks also predicting a recession, we will know next 2 quarters

 

I don't think it will change the psyche of average person.
90% of the people out there are just lemmings and have gold fish memories.
After 2-3 years it will all be forgotten.

 

I think your right, but it wont happen straight away. Just have to read some posts on PC many over the top fear??? Perhaps justifiable or Probably all baby-boomers??

 

Who knows. My gut tells me well recover sooner than many think. But certainly wouldn't be shocked if we have a recession. But I'm optimistic over the next 12 months IF we can get our economy back up soon.

We need our economy to get back to business Asap.

 

Thats what I have been banging on. Our economy will be a basket case if we dont get back soon.

 

All markets will suffer nationally without question to a varying degree with localised areas of greater stress.

No one can predict how long the virus will remain a threat at this stage so it's essentially making a prediction without a timeline. I hope these predictions are all wrong but I cannot see it being business as usual, caution will prevail, the economic shock won't be forgotten for the next decade.

Overseas Immigration is now non existent so the markets influenced primarily by this, Sydney and Melbourne will suffer. Likewise these cities also have the highest prices, lowest rental yields, the most indebted borrowers who are more vulnerable to changes in income. The job keeper payment might be sufficient to an OO to survive making repayments on a $200,000-$300,000 loan but not on a $500,000-$750,000 loan.
No foreign students will hurt both the economy and the rental market in particuly Melbourne.

The Queensland economy is more reliant on international tourism than other states, especially the Gold Coast, Sunshine coast, The Whitsundays and Cairns so I expect unemployment reach really high levels in these locations. Queensland population growth is partially via overseas immigration but is mostly interstate migration. Whether this would continue is uncertain.

WA will emerge in the strongest position in my opinion, some decrease in demand for resources but the Perth housing market has already suffered a long downturn. Prices relative to income are much more sustainable compared to Sydney or Melbourne.

Tasmania's residental boom is over and that market will enter a long deflation period over the next decade, former Air BNB properties will flood the resi market.

Canberra is insulated as government services are expanding, despite the Liberal party being in office I expect we have entered a period of 'big government'.

 

Resi maybe circa 25 % give or take.

Commercial retail and probably office, in for strife. Depending on time taken to open doors, I think many cafes and restaurants won't survive. Lost fitouts and after 6 month lock-out ban lifts, depending on lease remaining, some businesses will just walk away from leases. Anyone who has high LVR's on commercial assets is in for a world of pain. Problem with food/cafes and hospitality is when things return to "normal" whatever that "normal" will be, they are starting at one sale at a time. There is no pent up demand to consume the 50 or 100 coffees or lunches that people didn't buy or 50 restaurant meals they didn't consume.

 

Very well said, predictions I know, but I am thinking on same line

 

LVR/high debt will be the nail in the coffin

 

The whole 6 month no evictions is BS. Big mistake.

 

Perth’s on track to lifting some restrictions end of this month

we have to also be logical and look at each State and the numbers. If its safe then should be going back to work, open business’

 

totally idiotic

Passing the buck

 

All the entitled folks ( make no mistake there are heaps) will be taking the ****.

 

There's be lots of businesses that plan to bring staff back as soon as they can. However, I also expect that there are many businesses that will use this opportunity to let go of employees that were the lowest performers. They can blame it on COVID, uncertainty and lost revenue pretty easily and are after all looking at their wage bills right now.

So the whole bounce back thing (and consequently the roll on effects to the property market) to me is all about unemployment. I don't mean the official figure either, but rather the self identification of unemployment. So if I feel unemployed (but worked a few hours this week) I will probably act more prudently. Will be interesting to see how the unemployment and underemployment figures stack up over the rest of the year.

 

Its all about jobs

read this...... lots of pain ahead for Australia, if this is fact and the timeframe is correct

Pubs will be last to open as Australia battles to contain a second wave of coronavirus infections | Daily Mail Online

 

I deliberately do not read anything the Mail publishes. Utter tosh.

 

I was going to put a caveat? Why I said if there is any truth to this? Easy to find out

 

The AREIT sector has a 60% cap on leverage so won't be as exposed as non-syndicated or individual investors exposed to CIP. A plus for good governance even though it may be restrictive.

Will there be a correction - ummmmm?

What are the scenarios?

• Tenant bounces back to 80% capacity (eg gyms, childcare, cafes etc), ongoing 30% rent reduction - tenant exceeds previous profitability
• Tenant bounces back to 80% capacity (eg gyms, childcare, cafes etc), rent reduction is temporary - tenant doesn't return to previous profitability
  
• Tenant bounces back to 50% capacity, ongoing 30% rent reduction - tenant fails
  
• Tenant bounces back to 50% capacity, rent reduction is temporary - tenant doesn't return to previous profitability & fails quicker
  
• Tenant bounces back to 80% capacity, downsizes & WFH, rent reduction no longer a factor - tenant returns to/exceeds previous profitability

Plenty of other scenarios in between. Vacancies will increase due to failures, secondary market/sublease space will increase reflecting decreased demand (WFH being incorporated into workplace culture), lessors will be impacted by these structural changes.

Retail landlords may not be impacted as adversely over the longer term as many leases have a turnover clause keeping rent as a constant % of turnover.

 

Without a doubt a correction, its already starting

Australian housing prices fall as property market braces for downturn