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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.

By ·
24 Apr 2020

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:

Part One:

  • 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?

Part Two:

  • 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:


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