While property transactions have seen a considerable downturn during the Coronavirus lockdown, Australians are keeping a keen eye on the residential market, according to REA’s executive manager of economic research Cameron Kusher.
“In particular, they’re doing research and thinking about their next move once this is all over,” Kusher said in a live webinar this week.
“When we do start to come out of this, the cost of borrowing is going to be very low, and it’s going to encourage an increasing number of people to go and upgrade their home, move to a new property or build their dream home. It could also encourage people who are renting to get into property as well.”
While low consumer confidence means big financial moves aren’t a high-priority right now, Kusher said this could still represent “good opportunity for a strong recovery” post-crisis.
Supporting this idea, there’s been a recent 14% rise in ‘for sale’ search activity on realestate.com compared to the same period last year.
Additionally, the emergency RBA rate cut has led to rapidly declining mortgage interest rates, which also bodes well for borrowers.
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The REA doesn’t anticipate a considerable fall in house prices down the line but Kusher noted potential price shifts in the rental market, linking a surge in new realestate.com rentals to a drop-off in Airbnb listings.
“That product has essentially become unviable at the moment, so people are looking for someone to rent out those properties for the next six to 12 months,” he said. “That’s probably going to be deflationary for rental prices, so the cost of renting is likely to come down.”
If you’re a homeowner facing financial hardship, read about bank relief options, or investigate if you’re eligible for refinancing.