It is natural to be nervous about the property market outlook, especially with so much uncertainty at play. Industry and property experts have studied in great detail historical trends, and are closely monitoring the current local, national and global economic indicators. With this in mind, it is important to note that the Australian property market fundamentals, particularly South East Queensland’s, remain strong, despite the market volatility COVID-19 is causing.
These strong fundamentals are outlined below:
- Demand for property historically increases in Australia when international stock markets are falling and our dollar weakens in response to global financial instability, which in effect increases the attractiveness of Australian property from an international perspective;
- The RBA has cut interest rates once again to help provide a buffer to the current short-term impacts of the COVID-19 volatility globally, improving housing affordability and stimulating investment;
- The Federal Government has acted swiftly and firmly to minimise the local COVID-19 outbreak, injecting significant stimulus into the economy with a particular focus on supporting employment continuity (this, in turn, is very positive for residential property);
- A once in a generation level of infrastructure investment taking place right across SEQ, driving employment, migration (interstate and offshore) and property values; and
- Affordability, compared to our east coast counterparts, is at an all-time high, in turn driving significant interstate migration numbers to SEQ. This is creating major demand for premium quality residential property in an environment where supply is currently substantially constrained and will remain so for the next 2-3 years at least.
History has shown that even through global crises such as the GFC, 1991 recession, 1987 stock market crash and outbreaks of illness such as SARS, the Australian property market remained resilient. In fact, during the SARS outbreak, Brisbane’s property market experienced a boom due to its reliability, lifestyle and affordability, particularly relative to Sydney and Melbourne.
We are confident this demand is driven by a flight to quality in a market with extremely strong core fundamentals, increasing access to cheap credit, stable employment and very limited quality competition as supply remains constrained.
As a final thought, we must ensure we do all we can to keep in good health, and our thoughts are with all of those who are feeling the impact of COVID-19. That said, we should without a doubt maintain optimism and confidence in the robust market fundamentals that remain in place to deliver a nation-leading performance over the next five years.
