Investors Must Be Confident

Amid the unprecedented impacts of the coronavirus epidemic on Australia's economy, real estate investors are urged not to lose hope as housing fundamentals remain solid, according to one economist.

Diaswati Mardiasmo, chief economist at PRD Nationwide, said that investor confidence in capitals "should not falter" given healthier vacancy rates, particularly in Sydney and Melbourne.

[SQMResearchfiguresshowadropinvacancyratesto29%inSydneyand19%inMelbourne

"Despite the drop in unique listings in the short-term rental market, which may suggest that property was added to the market in the long term, there does not appear to be any serious effects on the long-term market, "Mardiasmo said.

Mardiasmo referred to the trend shown in the Airbnb data for the two capitals. She said duplicate registrations have increased in Sydney and Melbourne, while single registrations have decreased. Duplicate lists are specific lists found for at least two consecutive months.

Read also: Thinking long term is essential in the midst of the COVID-19 epidemic

"This suggests that properties from previous months are still actively listed on Airbnb and have not been moved to the long-term rental market. This potentially shows that Airbnb owners expect more long as their properties are rented out, "she said.

The decline in the unique lists in the Airbnb data could be due to the impact of the COVID-19 epidemic on the tourism industry. At the same time, Mardiasmo said the long-term rental market in tourist destinations was not showing an "unprecedented increase". This will put additional pressure on vacancy rates.

"Tourist destinations vary – in places not primarily dependent on tourists such as Bondi, Gold Coast and Sunshine Coast, vacancy rates have declined, but in regions such as Byron Bay and the Whitsundays or Airlie Beach, it has increased, "said.

In addition, the number of properties added to the rental market is slowing down. Mardiasmo said this means there is "no additional pressure" on the market in the long run. Given healthy vacancy rates, this will also boost investor confidence, she said.

In conclusion, Mardiasmo said that there appears to be a delicate balance between sales and the rental market.

"Those who choose not to buy can stay in the rental market, which benefits investors. However, at the same time, there will also be investors who will have to sit still, because their particular property had to be occupied by international students ". she says.

Louis Christopher, managing director of SQM Research, said that the impact of the coronavirus epidemic on vacancy rates depends on the economy.

"We will likely record further declines in rental housing vacancy rates as 2020 progresses, unless the country enters a prolonged economic depression," he said. .

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