Will Coronavirus Impact Property Prices?

PHOTO: Coronavirus

Major housing markets in Australia are expected to realise solid gains in prices over the next two years, but two things could potentially slow down the price forecasts: the coronavirus outbreak and a potential macroprudential measure, said an economist.

Trent Wiltshire, an economist at Domain, said the coronavirus outbreak in China might have an impact on Australia’s economy, albeit only in the short-term.

“It will hit the tourism and education sectors particularly hard. But it’s possible the outbreak will be much more severe and cause a significant economic slowdown in China, which would have a big impact on Australia’s economy,” he said.

In a recent statement to the House of Representatives Standing Committee on Economics, the Reserve Bank of Australia Governor Philip Lowe said the outbreak of the coronavirus represents a new source of uncertainty.

“It is too early to tell what the impact will be, but the SARS outbreak in 2003 may provide a guide. On that occasion, there was a sharp slowing in output growth in China for a few months, before a sharp bounce back as the outbreak was controlled and economic stimulus measures were introduced,” he said.