Why Australia Won't See House Prices In "Freefall"

Many Australians expect to see the market behave as it did during the previous economic downturns such as the Global Financial Crisis 2007, which was a financial and demand shock. Unlike now, previous downturns have primarily been financially-led, which is the significant and differentiating factor.

The banks are a pillar of support compared to a financial crisis, the coronavirus will be short-lived and Australia’s finance system has been equipped to handle non-performing loans and offer mortgage payment deferrals in the short term. The Reserve Bank is providing $90 billion to the banks at a rate of 0.25% in line with the record low cash rate to ensure a cheap line of credit is available throughout the crisis.

Unemployment will only hit some sectors. We are already seeing evidence how the Covid-19 crisis is pushing up the rate of the unemployment but this is polarised in specific sectors. Tourism, entertainment and hospitality sectors have already shutdown and we are seeing the fallout with rising rental listings. For more click here.

Source – Realestate.com – 06/04/2020