Episode Details

There are a lot of scary headlines at the moment.

All of the anxiety in the air can even make an optimistic person a little nervous.

In today's episode, I want to bring some perspective to the frightening headlines by explaining some of my thoughts on the current situation.

Then, I'll be talking to Dr. Andrew Wilson, who's also been around for a while and has seen and experienced things like this before.

By the end of the episode, I hope you'll be a little less scared, and also have some facts to work with.

Remember, most of the things we worry about actually never happen.

Seven reasons why I'm confident in our property markets despite the coronavirus scare

What's ahead for our property markets in light of the coronavirus issues?

Are they going to crash like the stock market has?

Is Australia going to fall into recession?

That's a question on the mind of many investors in light of the economic woes around the world and the uncertainty surrounding the coronavirus.

Now I'm not downplaying the potential medical issues related to the coronavirus.

In fact, I've looked up the definition of a "pandemic" and this definitely is a "pandemic" even though our health authorities are not prepared to call it one.

Clearly many Australians will come in contact with the virus over the next couple of months, some people will suffer cold and flu-like symptoms while other more frail members of the community will succumb to the germ.

And that is tragic.

At the same time, many businesses will suffer, particularly those in hospitality, tourism, education and those whose supply chain from South East Asia will be affected.

But based on my perspective having been involved in property for over 47 years, while this issue will have an effect on our economy and a short-term impact on our property markets because consumers will become less confident and sit on the sidelines waiting for things to become clear, I believe that a year from now, and in particular five years from now. and most certainly in 10 years from now, this pandemic will have had no influence on where the Australian property market will end up and the value of your and my home at that time.

But this is the first global crisis we're experiencing in the social media age and we've learned that:

• Information spreads fast and
• False or sensational information spreads faster.

So, remember these wise words...

As Warren Buffet said: "Be fearful when others are greedy and be greedy when others are fearful."

Homebuyers and long-term investors who have a secure job and income and pre-approved finance should take advantage of any short term downturn in our property markets to set themselves up for the next phase of the property cycle.

As I said, I'm comfortable with the underlying fundamentals supporting our property markets int the medium to long term.

Let's look at a couple of them…

1. Population growth

Australia's population is growing by around 360,000 people per annum, meaning we need to build around 170 to 180,000 new dwellings each year to accommodate all the new households.

2. Declining housing supply

The oversupply of dwellings in many Australian locations is now dwindling and there are very few new large projects on the drawing board.

Considering how long it takes to build new estates or large apartment complexes, we're going to experience an undersupply of well-located properties in our capital cities in the next year or two.

3. Interest rates are low and will go down further

The prevailing low-interest-rate environment is making it easier to own a home, either as an owner-occupier or investor.

4. Smaller households are becoming the norm