{"id":24177,"date":"2020-03-19T10:07:45","date_gmt":"2020-03-18T21:07:45","guid":{"rendered":"https:\/\/propertynoise.co.nz\/au\/?p=24177"},"modified":"2020-03-19T10:07:58","modified_gmt":"2020-03-18T21:07:58","slug":"coronavirus-and-the-australian-property-market","status":"publish","type":"post","link":"https:\/\/propertynoise.co.nz\/au\/coronavirus-and-the-australian-property-market\/","title":{"rendered":"Coronavirus And The Australian Property Market"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\"><strong>PHOTO: CoreLogic Report<\/strong><\/p>\n\n\n\n<p class=\"has-drop-cap wp-block-paragraph\">Amid the spread of coronavirus, the past few weeks have seen increased expectations of an Australian recession, a slowdown in business activity and trillions of dollars wiped off global share markets. It has many asking what the impact of the coronavirus would be on Australian residential property.&nbsp;<br><br>This note explores fundamentals of housing to better understand outcomes in the current climate. It is found:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Housing has performed relatively well against negative economic shocks, but the unique conditions of a pandemic-induced economic slowdown must be considered;<\/li><li>Housing is an illiquid asset and a consumption good, which shows far less volatility and decline than share markets;<\/li><li>In the coming weeks, property transactions may fall significantly, &nbsp;but the impact on values is unclear; and,<\/li><li>Existing economic headwinds, including high household debt, make the property market particularly susceptible to a fall in demand. However, Australia does not have \u2018one\u2019 property market, and a decline in demand will be tempered by the composition of the local workforce, and the state of household finances. &nbsp;<\/li><\/ul>\n\n\n\n<h4 class=\"wp-block-heading\">Australian residential property has historically fared well against negative economic shocks<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">In beginning to assess the impact of the current slowdown on property, it is worth exploring how property has historically responded to negative economic shocks.&nbsp;<br><br>Major share market losses and recession are not necessarily predictors of declines in housing values. This can be seen in the figure below. When significant, negative economic shocks occur, the effect on the housing market varies. Property value changes depend on the level of impact on Australian industry.&nbsp;<br>As an example, the 1987 \u2018Black Monday\u2019 stock market crash was a negative shock, in which the Australian share market lost&nbsp;<a href=\"https:\/\/www.abc.net.au\/news\/2020-03-17\/us-stocks-nosedive-trading-halted-a-third-time\/12061674\" target=\"_blank\" rel=\"noreferrer noopener\">approximately 23% of its value<\/a>&nbsp;in a single day.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" data-src=\"https:\/\/www.corelogic.com.au\/sites\/default\/files\/2020-03\/image_1.jpg\" alt=\"\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" class=\"lazyload\" \/><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\"><br>But housing values were largely unaffected. By October of 1988, residential property values experienced double-digit growth, as financial deregulation contributed to asset value inflation.\u00a0<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">READ MORE VIA <a href=\"https:\/\/www.corelogic.com.au\/news\/coronavirus-and-australian-property-market\">CORELOGIC<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>PHOTO: CoreLogic Report Amid the spread of coronavirus, the past<span class=\"more-link\"><a href=\"https:\/\/propertynoise.co.nz\/au\/coronavirus-and-the-australian-property-market\/\">Read More &rarr;<\/a><\/span><\/p>\n","protected":false},"author":1,"featured_media":24178,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"footnotes":""},"categories":[461747081],"tags":[478099519,478098892,478100297,478108580,478098535,478101720,478098579,478099918,478098888,478099324],"class_list":["entry","author-data123nz","post-24177","post","type-post","status-publish","format-standard","has-post-thumbnail","category-australian-property-real-estate-news","tag-australian-property-market","tag-corelogic","tag-corelogic-data","tag-coronavirus","tag-house-prices","tag-housing-values","tag-property-market","tag-property-sales","tag-reserve-bank","tag-residential-property"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.6 - 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