There is no doubt that the coronavirus has completely altered the story for 2020. The people who have dreamt about purchasing an amazing commercial property in Canberra are sitting up with sadness on their faces. Sellers, on the other hand, too, suffer a lot due to the crashing of property prices. If nobody is coming to them for buying commercial property, they will surely fall down in the real estate market. But what to do, it’s happening not in Australia only but all across the world.
As health is wealth, people now are trying to stay in the homes, quarantining themselves to protect their lives from the coronavirus pandemic. So, in this situation, they have completely altered their minds buying property after everything will be fine. All this leads to an impact on the real estate market and crashing prices of commercial property.
To help you understand more about how the coronavirus pandemic affects the property prices, read on this post till the end. We have curated some of the major reasons beyond the price clash.
Table Of Contents
- Rate Cuts
- Reduced Asset Prices
- Failing Housing Supply
- Population Growth
- Low-Interest Rates
- Let’s Wrap It
5 Major Reasons That Are impacting Property Prices
- Rate Cuts
There’s no hidden fact! It’s true that the coronavirus pandemic is greatly impacting the economy as a whole. The RBA has released its stimulus package and there may be added fiscal stimulus, but there are still some boundaries to what any government should do. Simply means, there will be a huge negative effect on employment. All will further lead to a sharp shock to the economy.
In the real estate market, the main thing of being worried is there will be a great pullback by the potential customers and it will take the momentum out of the industry, and sellers will perceive price falls and lost business.
- Reduced Asset Prices
The other factor that coronavirus is hitting a lot is asset prices. You can see what’s done to asset prices. No doubt, interest rates are lower but other assets, such as equities, are also being greatly hit. For many leading marketers whose wealth is tied up in the share market, see their wealth has come into risk and many even have lost it completely. Therefore, the capacity for many people or businesspersons to use that wealth to invest in the real estate market has also been reduced.
- Failing Housing Supply
The oversupply of homes or commercial properties in many Australian locations is now decreasing and there are very few new large projects on the drawing board. The reason without any doubt is a coronavirus outbreak. Considering how long it takes to develop new estates, big apartments, or complexes, sellers are going to experience an undersupply of well-located properties in the capital cities in the next few years, falling in newly constructed housing supply.
- Population Growth
Population Growth is another one of the biggest reasons behind the clash of commercial property prices. It is to be stated that nearly 60% of Australia’s growth is reliant on immigration. As there was a travel ban from one country to another, it affects population growth and the overall economy of the country. It’s as simple as that – if there will be no outsider in the country, nobody will buy commercial property, and thus, sellers lead to reduce the property prices. The reason being, the ones, wh0 are living there do not plan to leave that property.
- Low-Interest Rates
The current low-interest-rate climate is making it easier to buy a commercial property, either as an owner-occupier or investor. It’s never been more contentious for marketer, buyer or investors to buy a property with the “net outlay” – the out-of-pocket expenses. All it happens due to low-interest rates.
How cheap the finance is today and how much people are ready to pay for the property is becoming a turning point in the real estate market. If there will be a low-interest rate, the people will likely buy the property and the sellers, on the other hand, are too likely to get a great hit. This way, you can see how low prices impact the market.
Besides these reasons, there are many more that you must know no matter if you are a seller or a potential buyer. After all, knowing what’s happening in the real estate market is your right. If you are a buyer looking to buying a house in Canberra, it will help you make purchases at the right time, not in the situations that will impact your wealth and finances.
Let’s Wrap It!
Either you want to buy the property or sell a property, be sure you check the prices of the property. It fell down due to coronavirus pandemic and impacting the real estate market greatly. No matter in which area or locality you are willing to buy property in Canberra, the overall picture will remain the same. All you have to do to buy an amazing commercial property is doing thorough research.
Know the terms and conditions for each and everything, then decide wisely making an investment in the coronavirus pandemic would be a great decision or not!
When you come to know everything related to buying a property in brief, you will see the difference. We hope you do the same and ask us if you have any queries.
Till then enjoy reading, stay home, stay safe!
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