Part Two: Has COVID-19 crashed the 'Great Australian Dream'?
The second episode looking at property, and the current challenges that COVID-19 is presenting.
The previous two episodes of our live From the Bunker webinars looked at COVID-19's effect on both commercial and residential property. You can find other episodes from this series in the Events Section.
Here are the key takeaways for our double episode on property:
- Housing is facing its biggest crisis since the GFC; as clearance rates collapse, buyer enquires fall and sellers go on strike.
- Declines will be driven by state and local factors with the cities likely to have bigger falls after rallying significantly more than the regions during the housing-led recovery of 2013-2017.
- Employment will be key to buyer sentiment. If we see unemployment pushing up into the 12%-15% levels housing will see an even stronger buyers strike than currently forecasted.
- Investors are facing the unenviable position of a failing investment as rents are slashed, leading to lower yields and possible negative returns for the foreseeable future as tenants look for rent relief. Could this see force selling?
- Listed property is facing its most significant structural change in a lifetime as tenants unite to demand rent relief and structural changes to rental agreements.
- Unlisted property is facing possible investor strikes as illiquidity, collapsing returns, and loss of paper value see increased redemptions.
- We examined why rising unemployment is bad news for speciality and high-end speciality leases.
- Why consumer behaviour in the post-COVID-19 world will likely mean listed centres will see increased vacancies.
One of the sectors that may feel the brunt of both a residential and commercial investment downturn are the banks which will be the focus of next weeks From the Bunker webinar. You can register here to watch this webinar Friday 1 May at 9:30 am AEST.
We'll be joined by special guest, Nathan Bell, Head of Research and Portfolio Management at Intelligent Investor. Nathan has researched and written extensively about Australian banks, and this is a prime opportunity to see where he thinks banks are heading.
You can watch both Part One and Two below: