Covid-19 impacts Central QLD property market
THE Central Queensland property market isn’t immune to the impacts of COVID-19 says a CQUniversity lecturer, who is trying to educate people on the complexities.
The nation has not encountered a recession since 1991, as a consequence individuals younger than 50 will not have experienced an enduring decline in Australian house prices.
CQU Head of Property, Dr Steven Boyd, said impacts to the market include “valuation uncertainty” and “unsustainable price trends.”
Both valuers and buyers were trying to navigate unprecedented market conditions.
“There have been a series of forecasts from senior economists in the government and banking sectors to the decline of housing prices - some extend to price drops of 20 per cent,” he said.
“With an extended downturn in the global economy, there may be regions that realise falls of this nature.
“This is particularly worrisome when you consider the home is often the asset mortgaged to finance business ventures. In that way, house price reductions can have a real impact on the ability of small business owners to sustain their business or recruit more staff.”
The pandemic isn’t all bad news, Dr Boyd said, with some industries and companies developing fantastic innovations.
“We have witnessed areas where there is almost a sense of euphoria, as physical distancing restrictions ease and the benefits are realised from government-initiated incentives,” he said.
“For example, there are regional markets where increased activity in some resources and rural sectors have led price increases.”
Dr Boyd said the longer the pandemic restricts trade, the more severe the impact will be on household income and longer-term house prices.
Associate Professor Garrick Small agreed that it was important to ensure short term incentivising does not set households up for a substantial fall in the future.
“House pricing is a result of household economic vitality,” he explained.
“Over a longer period, affordability and sustainability play a more significant role in house pricing for occupants to be able to pay their rent or mortgage.”
To help CQ residents understand the current market, the university has partnered with the Australian Property Institute to deliver a national webinar titled ‘valuing in the current climate’.
Expert speakers will address property economics, law, accounting, and valuation through a demonstration of practical ways to value the income shortfalls of financial impacts throughout a half-day webinar on Wednesday.