The COVID-19 epidemic has tarnished the outlook for global economies, which could force investors to seek low-risk asset classes like property, even with weak population growth, according to an expert.
Tim Reardon, chief economist at the Housing Industry Association, said that the coronavirus pandemic could prolong the sequence of population losses in the coming months.
The latest figures from the Australian Bureau of Statistics show that in the quarter of September 2019, the population grew only 1.48%, compared with 1.53% in the previous quarter.
"This decline is likely due to tighter visa restrictions and the slowing national economy in 2019," said Reardon.
Population growth in all states, except Western Australia, has slowed. Reardon said the COVID-19 epidemic will likely reduce significant gains in the coming months, especially given the economic shocks.
While moderating population growth will likely slow down residential construction in the medium term, Reardon said it is very likely that investors will continue to invest in categories of investment. low risk assets like real estate.
"If this shock is short term, investors may feel compelled to redirect funds from the high risk asset classes to the low risk asset classes. lack of population growth, "he said.
In a separate analysis, Eliza Owen, head of residential research at CoreLogic, said that the property has historically withstood adverse economic shocks relative to other asset classes such as stocks.
"If monetary and fiscal stimulus can adequately support business and household income in the context of the slowdown, then the coming months could see a sharp contraction in sales volumes, but not necessarily in housing values" said Owen.
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