Coronavirus property risk to be “short and sharp”, experts claim

Coronavirus property risk to be “short and sharp”, experts claim nmprofetimg 1552
Coronavirus property risk to be “short and sharp”, experts claim capi d41a6a72b0eb344a0e8e5219d249e6bf 4ce925290e4cb8b87e23e8427b3142f5

Hotspotting director Terry Ryder said real estate tended to perform well during times of economic duress.

Coronavirus is likely to hit property sales volumes more than prices and the market could quickly rebound after a “short, sharp downturn”, a prominent real estate analyst has warned.

Hotspotting director Terry Ryder told a recent webinar for real estate consumers that fear about economic uncertainty was understandable but buyers needed to view property as a long-term investment.

“It is a time to be looking for opportunities when others are perhaps intimated and sitting on the fence,” Mr Ryder said.

MORE: Reserves tumble despite growing COVID-19 panic

Social distancing the go for Western Sydney auctions

Government financial stimulus and flexibility from banks during the Coronavirus shutdown would help cushion the property market, Mr Ryder added.

Property markets could record a reduction in activity but not a significant reduction in prices, he said.

“One of things that is happening is vendors are already not listing their properties for sale at the same levels they were a year ago and two years ago – and I think that is going to be exacerbated by the virus crisis,” Mr Ryder said.

“We are still going to have demand, but have relatively few properties for sale and that will help to put a floor under property values.”

The main changes from the pandemic would be a shift in how property was bought and sold, such as fewer auctions and open homes would be conducted virtually, Mr Ryder said.

Former Real Estate Buyers Agent Association of Australia president Rich Harvey said the crisis would eventually blow over.

Hot Auctio Bilgola Plateau  Coronavirus property risk to be “short and sharp”, experts claim capi d41a6a72b0eb344a0e8e5219d249e6bf 22255e6fc0d07983ace67938e6180610

There could be a drop in auctions. Picture: Julian Andrews

“Generally, the property market has performed well during these economic shocks and it is quite resilient,” Mr Harvey said.

“If we think back to the Global Financial Crisis the share market plunged 55 per cent in 2008 but the property market only dropped 7 per cent during the same time period – and then rose 13 per cent in 2009 and a further 6 per cent in 2010.”

Mr Harvey said he didn’t expect weaker sentiment to be a long-term issue.

“The property market is in some ways sentiment driven but it is also fundamentally driven by population growth, by the state of the economy, including employment levels and infrastructure growth,” he said.

“I believe (Coronavirus) is going to change the way in which we interact with each other, but I don’t believe it is going to fundamentally change the property market.”

Buyer's agent Rich Harvey outside a Forestville property in Sydney, NSW.  Coronavirus property risk to be “short and sharp”, experts claim capi d41a6a72b0eb344a0e8e5219d249e6bf 15eca1827c8ce476586e74c8e3e8e0e8

Propertybuyer director Rich Harvey.

Mr Harvey said Australia had a “demand heavy” property market and a lack of supply, which would not change once virus cases peaked.

“There is strong demand sitting under the surface there, and tight restrictions on development and on planning are going to continue to create supply shortage,” he said. “We are just going to see a very severe short-term downturn and then a very sharp rebound.”

Mr Harvey said it was a good time for those with secure employment and finances to consider buying. Homeowners, meanwhile, should talk to their bank about getting a better rate to refinance or taking a mortgage payment holiday.