Although digital media have many positive points, one of the biggest drawbacks is that they multiply negative news by 50. The proliferation of negativity seems to have gradually diluted the ability of the human race to process information in a calm and logical manner.
If you are of the half-empty glass type, the coronavirus is your last dose of unhappiness and sadness.
From trade wars and natural disasters to the threat of dismantling negative gears, the stock market falters over the years, the mining downturn and election campaigns, there is always something going on somewhere that some say could to be the next Armageddon
But the reality is that the direct impact of these events on the real estate markets is nowhere near as overwhelming as alarmist comments suggest.
On a balance of probabilities, coronavirus (a respiratory disease of the same family of viruses as colds and SARS) is likely to have a minor long-term influence on Australian property markets.
To avoid any doubt, we maintain our initial position that real estate market conditions at this time are the best they have been in more than a decade. The fundamentals have not changed!
"If you are the half-empty type, the coronavirus is your last dose of unhappiness and sadness … something is always happening that could be the next Armageddon"
To be honest, we anticipate that this will create a unique buying opportunity, as it is a window in time that will be marked by the solid start until 2020 and when Nervous Nellies will return to the market once they & # 39; I realized that there was nothing to worry about.
From the point of view of the real estate market, a virus is a one-off event that comes and goes in a relatively short period of time. Like SARS (2002-2003) and swine flu (2009-2010), we have every reason to expect that this risk of coronavirus will largely disappear in a few months, not in a few years.
The stock markets generally react to sentiment, as evidenced again by the ASX 200 index losing 8% in value during the month of February. History has shown that some equity investors react to the perceived uncertainty caused by major world events by withdrawing their stocks and placing their money in safer alternatives.
Real estate has always been a popular alternative, but with cash rates so low, it might seem even more attractive as an asset class, as opposed to stock market shares, because it does experiences no wild fluctuations within short periods of time.
The impact of a virus on a property market is like a water stain on the ceiling of a house – we know it must be taken seriously and that an appropriate investigation will find a solution to the cause, but it has no bearing on the whole on the foundations of the assets.
To use Warren Buffett's words, "the moment to be greedy is when everyone is afraid". When the flock of seagulls come out and start fighting for this flea, it will drive up property prices, making the biggest beneficiaries those who ate their chips before the flock arrived.
Simon Pressley is director of real estate market studies and general manager of Propertyology
Main suburbs:
campsie
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vale eagle
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tiwi
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willliamstown
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thebarton
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