The Hervey Bay property market has not yet seen dramatic impacts due to COVID-19. There are three main factors which need to be considered when discussing the resulting possibility of a real estate downturn.
Australia is not simply one real estate housing market. There are micro- markets with their own conditions.
- Regional or City: The regional Australian real estate market, such as Hervey Bay would be different to the market in a capital city.
- Demand and Supply: A shortage of supply and demand of housing in Australia (viable property) results in price rises. Whereas a market oversupply causes a drop in house prices. We see a steadier housing market supply equation occur where levels of housing supply and demand balance out. Supply-demand greatly affects property prices.
- Financial Factors: There is also impact from RBA Interest rates, bank mortgage competition and money supply in the form of Government financial stimulus packages.
Responses and Consequences of the Economic Impact of COVID-19
•We’ve seen the RBA cut the cash rate twice during March 2020. Banks look like they will forward these savings on and are creating new policies to better assist home loans during the immediate pandemic and going forward.
•Some banks are offering mortgage relief by freezing home loan repayments for six months, refinancing, and/or extending the loan term without penalty.
•These new policies, along with the low $AUD mean that properties, especially in the larger cities are now more affordable and/or more accessible to overseas buyers.
•Since the coronavirus pandemic, investors are considering property market investment, as opposed to the share market.
•The Government financial aid and stimulus packages allowing access to funds that may relieve financial hardship in the short term. These measures although helpful in the short term, may have more negative economical side effects down the road.
Consumer Confidence Impacted
One of the key impacts of coronavirus COVID-19 is that of consumer confidence. Uncertainty abounds around the ultimate length of the restrictions and if the Government stimulus packages, RBA , bank policies, etc will be enough. There’s also wide concern as to what these institutions will do after the six months period.
Sellers Asking Should I Sell Now or Wait?
Real estate agents do not have a crystal-ball regarding price but short supply market conditions always indicate that NOW is always the best time to sell.
For investors and home buyers that are ready to buy in your area; NOW is also the best time; especially with record-low cash rate(s), relaxed lending and banks offering excellent deals. These may adversely change our Hervey bay property market in the future.
In a property oversupply market, selling now may get you in front of any future price drops in the Australian property market. If you do decide to wait; you may risk higher competition as more properties come onto the market from sellers that are under strong financial and/or personal pressure to sell. There is also the potential influx of deceased estates flooding the property market. The result of an oversupply of properties for sale— downward pressure on prices.
Moving Forward with What we Know Right Now
Currently, there are new coronavirus update announcements being made by health officials every day. New Government legislation and policies are also being implemented very quickly. Be aware that there is a rise in so-called media experts that are predicting house value movements that may or may not be relevant, true, or helpful.
We advise that both sellers and buyers discuss any financial matters with their financial advisor and any legal matters with their solicitor. All real estate matters are best discussed with a trusted local real estate agent or broker.
To assist the Fraser Coast, Maryborough and Hervey Bay property sellers sell during or after the corona virus pandemic, Property Brokerage are offering our Interactive Open Home Tours FREE of charge with all new property listings throughout the district. Get in touch to know more.
To assist Fraser Coast, Maryborough and Hervey Bay property sellers at this time, Property Brokerage are offering our Interactive Open Home Tours FREE of charge with all new property listings throughout the district.
If you’d like more information send us an email. If you have further concerns or any questions, you’d like us to answer send us an email or feel free to leave your comments directly on the blog.