The Federal Government has introduced social distancing restrictions to limit the potential spread of COVID-19. Among the restrictions is a ban on auctions and open house inspections, which is already reducing the competition for available properties, thereby cooling the market and its prices.
The coronavirus has also resulted in many thousands of people losing their jobs or having their hours cut dramatically. A number of these people may have been looking to buy and no longer have the job security needed to purchase a property. Even those with secure jobs are likely to avoid long-term commitments in the face of such uncertainty.
However, the property market is based on long-term trends. While we may see a short-term fall in house prices and a slowing of the housing market, the long-term fundamentals remain sound.
The majority of capital cities will return to growing populations, who will be seeking to buy or rent property. In the long term, working from home may become a sustained practice – meaning there could be greater demand for regional housing as people seek a lifestyle that isn’t focused on city life.
Housing construction has slowed, meaning there is demand for existing properties. And historically low interest rates are in place for the next couple of years to offset the slowing economy and consumer caution.
There are never any guarantees when it comes to investing, but the long-term fundamentals of property remain sound – even against the immediate downward pressure on the market.