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Simon

Simon

Wage subsidy is to ‘relieve financial pressure’ for tenants and landlords, according to the Property Investment Professionals of Australia. This week the government confirmed a $130 billion JobKeeper wage subsidy whereby $1,500 would be granted to eligible employees and businesses per fortnight. Commenting on the move, PIPA chairman Peter Koulizos said the wage subsidy would “go a long way towards solving tenant and landlord issues during the coronavirus crisis”. “This policy has prompted a collective sigh of relief of sorts from tenants and landlords as well as everyone employed in the real estate sector nationwide,” Mr Koulizos said. “The payment will hopefully mean that there doesn’t have to be a philosophical debate over whether tenants or landlords are more worthy of financial support during these difficult times.” Mr Koulizos noted that prior to the announcement, many property investors had been worried about covering mortgage repayments if their tenants could no longer afford to pay the rent. “Landlords want to maintain a healthy relationship with tenants but are generally not in the financial position to cover mortgage repayments for months on end,” Mr Koulizos said. Looking ahead Mr Koulizos said that while it was impossible to forecast the impact of the COVID-19 pandemic on the real estate market, some of the changes the market has seen are not as “severe as they at first seemed”. “The banning of traditional open homes and auctions was not unexpected and, thankfully, technological advances may mean this is less disruptive to the real estate industry than it at first appeared,” Mr Koulizos said. “Buyer’s agents and property investment professionals actually have much to offer buyers in these turbulent times with the additional security they provide via their agent networks, negotiation skills as well as vast experience.” In conclusion, Mr Koulizos said: “At the end of the day, we are in the business of providing shelter for our population and that will never change.” Source:x Wage subsidy to ‘relieve financial pressure’ f... The federal government’s recent JobKeeper wage subsidy is set to significantly help relive rental and mortgage stress, according to the Property Investment Professionals of Australia. www.smartpropertyinvestment.com.au
0 Reply 12 Views 3D ago
Joshua

Joshua

What’s ahead for our economy? What’s going to happen to unemployment? How high is it going to get? What will happen to property values? How much are they going to drop, or are they going to remain stable if the market comes to a halt? We are all looking for some forecasts, aren’t we? We all want to try and find a degree of certainty in these times of uncertainty? But how useful is forecasting under such extreme uncertainty? We don’t have a historical template on which to base and judgement or our forecasts? And there are many wild forecasts being bandied around, so please be careful who you listen to. Here’s what ANZ had to say: The Australian economy is facing an unprecedented challenge as governments here and abroad put in place policies to ‘flatten the curve’ of the coronavirus. This is, foremost, a health crisis, but it has quickly become an economic crisis that has substantial impacts on individuals and families as businesses close and jobs are lost. There is no historical template on which to base a judgement about the economic outlook, making forecasting extremely difficult. The federal government may have delayed the Budget until October partly for this reason. Forecasting under extreme uncertainty Just over a week ago, we published a set of economic forecasts that had GDP dropping 2% q/q in the June quarter and the unemployment rate rising toward 8% by the end of the year. These forecasts reflected what we knew at the time: a close-down of Australia’s borders, a ban on major events and advice around social distancing. By the time the weekend was over things had moved on considerably, with restaurants and cafes ordered to close. Since then the rules have got even tougher. This is likely to be the nature of things for some time. Which makes forecasting the outlook problematic. Activity slumps in Q2 as shutdowns broaden Given the nature of the shutdown driving the economic outlook, we approached this forecasting exercise from an industry perspective. The Government is yet to announce the widespread closure of non-essential businesses, and yet to clarify which industries will be considered “essential”. Overseas experience shows various approaches, but we assume Australia’s shutdown will be broadly similar to the New Zealand experience. It is already apparent that the industries hit hardest will be hospitality and arts & recreation. Key assumptions: A six-week shutdown, with activity confined to “essential services”, as well as those that keep supply chains open Agriculture: negligible net impact Mining: generally mining keeps going, but with some disruption, due to worker access, and containment measures Manufacturing: food manufacturing remains open, some other manufacturing remains open for “essentials” and supply chain requirements Utilities: remain openConstruction: largely shutdown, but some major infrastructure projects continue, and any construction related to essential services Wholesale trade: partial shutdown, food and other essentials open Retail trade: shutdown, apart from supermarkets, bottle shops and pharmacies Hospitality: full shutdown, including takeaway Transport: not shutdown, but private transport usage will be sharply lower Information media & telecommunications: some services to benefit, but some services shutdown, net effect expected to be modest net fall Finance: essential financial services still open, some other financial services shutdown, net effect expected to be modest net fall Rental, hiring & real estate: some areas shutdown Professional services: largely delivered, with some disruption Administrative services: largely delivered, with some disruption Public administration and safety: largely delivered, with some disruption Education: largely delivered, with some disruption Health: mostly open, but some sectors like child care shutdown Arts & recreation: full shutdown Other services: some areas shutdown. Details inside:x The economic outlook in a time of great uncertaint... What's ahead for our economy? What's going to happen to unemployment? How high is it going to get? What will happen to property values? How much are they... propertyupdate.com.au
0 Reply 19 Views 3D ago
Joshua

Joshua

Many businesses over the next few months will be forced to shut their doors to slow the spread of COVID-19. The important thing for landlords to remember is this is a short-term problem and we need to communicate and work with our tenants to help them get through this tough period. The reward for landlords after all of this is the tenant will remain in business and there is quite possibly one of the biggest asset boom periods we will ever see waiting for us once the threat of COVID-19 passes. With interest rates at record lows and government stimulus packages at record highs, tenanted commercial properties will be more valuable than ever! Let’s discuss how to help your tenant get through this tough period ahead. 1) Rent deferrals Some tenants may ask for their rent to be waived for the next three months. For example, a gym business can’t operate and generate an income over the next few months. So, paying rent isn’t fair in my opinion. Rather than just giving the tenant a break in rent, discount their rent to zero for three months and give them the option to sign a longer lease. At least three to 12 months longer. 2) Rent relief Technically speaking, there is nothing stopping the owner from demanding the full rent amount. However, as with everything in business, it’s a commercial decision for you to decide what the best direction to take. A rent discount/relief might be the best option to take as you want your tenant to be there in business 12 months from today. A strategy might be discounting your rent by 50 per cent and then you can approach your bank for an interest deferral period. 3) Push back and refer to government incentives Many businesses will not be affected by COVID-19 but still ask for a discount. I personally own a small supermarket and the supermarket tenant asked for three months free rent. I politely pushed back at the situation by asking why revenue has dropped (when every other supermarket seems to be booming in trade). I then suggested the tenant explore government grants made available to small businesses under the stimulus measures that have recently been announced. Source:x Strategies to help your tenant if they are affecte... Scott O’Neill from Rethink Investing shares his tips to help tenants amid COVID-19. www.smartpropertyinvestment.com.au
0 Reply 9 Views 3D ago
Royal

Royal

Amid the spread of coronavirus, the past few weeks have seen increased expectations of an Australian recession, a slowdown in business activity and trillions of dollars wiped off global share markets. It has many asking what the impact of the coronavirus would be on Australian residential property. This note explores fundamentals of housing to better understand outcomes in the current climate. It found: Housing has performed relatively well against negative economic shocks, but the unique conditions of a pandemic-induced economic slowdown must be considered; Housing is an illiquid asset and a consumption good, which shows far less volatility and decline than share markets; In the coming weeks, property transactions may fall significantly, but the impact on values is unclear; and, Existing economic headwinds, including high household debt, make the property market particularly susceptible to a fall in demand. However, Australia does not have ‘one’ property market, and a decline in demand will be tempered by the composition of the local workforce, and the state of household finances. Australian residential property has historically fared well against negative economic shocks In beginning to assess the impact of the current slowdown on property, it is worth exploring how property has historically responded to negative economic shocks. Major share market losses and recession are not necessarily predictors of declines in housing values. This can be seen in the figure below. When significant, negative economic shocks occur, the effect on the housing market varies. Property value changes depend on the level of impact on Australian industry. As an example, the 1987 ‘Black Monday’ stock market crash was a negative shock, in which the Australian share market lost approximately 23% of its value in a single day. The share market and housing market perform differently Aggregate figures on the housing market suggest that the slowdown in economic activity from the coronavirus has not impacted housing markets in the same way as equities. This is nothing new. Historically, comparing the S&P ASX 200 index with the CoreLogic home value index, suggests that property responds to macroeconomic conditions at a lag, and avoids the same extent of decline or volatility. Sales activity likely to decline, while the impact on values is less clear Property transaction volumes are likely to fall in the coming months, but the outcome for values depends on temporal expectations around coronavirus, and longer-term employment conditions. In the short term, the coronavirus and subsequent share market declines have already had a significant impact on consumer confidence. This may lead to postponed dwelling purchases, as housing is an expensive, high commitment purchase decision. Property values may not be impacted the same way. One important facet of the unfolding economic slowdown, is that it is led by institutional responses to the coronavirus pandemic. This is a unique cause for halting production and consumption. Vendors may view the current pandemic as a temporary economic condition. If monetary and fiscal stimulus can adequately support business and household income amid the slowdown, then the next few months could see a sharp contraction in sales volumes, but not necessarily dwelling values. This is because the expectation would be for market activities to return. Influenza periods for example, typically last 3-4 months. Details inside:x Coronavirus And The Australian Property Market Amid the spread of coronavirus, the past few weeks have seen increased expectations of an Australian recession, a slowdown in business activity and... propertyupdate.com.au
0 Reply 26 Views 9D ago
Joshua

Joshua

Some of Sydney’s top agents have reacted positively to PM Scott Morrison’s banning of real estate auctions and open homes last night to control the spread of coronavirus. “We have to adapt,” says Ray White TRG principal Gavin Rubinstein. “We can do one-on-one inspections, buyers can still bid in virtual online auctions and we’ll be moving to more private treaty campaigns. “These new challenges are really going to qualify the buyers — so we’ll be only dealing with motivated buyers and motivated sellers in smaller volumes.” He said big sales were continuing. Last night he and colleague Evan Williams negotiated the sale of the Double Bay home of OVATO publishing chief operating officer James Hannan and his wife Laura. The four-bedroom residence with off-street parking at 18 Epping Rd had been scheduled for a March 31 auction with a $4 million guide. They sold it for about $4.4 million. Evan Williams said: “The numbers we had through Epping Rd was staggering …. we had 137 buyers inspect the home across three Saturdays. “It’s clear while things are clearly changing people still need a place to live.” And the pair also sold an apartment at 22/3-5 Marathon Rd, Darling Point. It sold above the $3 million guide. Attitudes change quickly in these days of the coronavirus. What seemed acceptable on Monday, seemed too risky by Tuesday night. Auctioneer Damien Cooley, who on Monday morning thought registered bidders would still be able to attend his in-rooms auctions in Double Bay, said last night: “In these troubled times, the move to ban in-rooms auctions, on-site auctions and open home inspections was expected. “Not this soon, but expected none the less.” He said Cooley Auctions was well prepared, with his AuctionNow by Realtair platform that “enables us to be completely online”. He’s been fielding calls from agents across Australia and New Zealand all week inquiring about the platform. It‘s possible to watch, register, bid, buy and exchange on any device, anywhere in the world. “The restrictions will pass, but our industry will change forever,” he added. Read more:x Coronavirus: Agents react to bans on real estate a... Some of Sydney’s top agents have reacted positively to PM Scott Morrison’s banning of real estate auctions and open homes to control the spread of coronavirus. www.realestate.com.au
0 Reply 19 Views 10D ago
John

John

Are you looking to invest in property? Maybe to take advantage of all the fright in the market, or maybe later in the year when the COVID -19 problems are over? Well…Property has been quite a forgiving asset over the past few decades but moving forward there are many things that have changed. You cannot simply adopt a buy and hope strategy any longer. It all comes down to the way people are now choosing to live. Younger Home Buyers The priority for the next generations involves instant gratification. They want to be where the action is and want everything on their doorstep here and now and. Rather than moving 20km – 30km away from the CBD, they are moving closer in. They are trading big backyards and houses for balconies, smaller courtyards and lower maintenance living. [adrotate group=”85The later generations priorities have changed also. It used to be about the see change or tree change, but in reality, it was only small sections of this demographic that made the move. The majority are staying put, they want to live close to their Doctor or Dentist, their local shops and cafes also and importantly their family. Many are also choosing still to continue working, albeit at a much slower pace. They are just selling the larger 4- or 5-bedroom home and moving into something much smaller and low maintenance. The shift is on More people will continue to want to live in our inner cities. You need to really understand this key point if you are going to be successful with property over the next decade. If you continue to buy in outer areas, where there is less demand for property, you are really going to struggle. Change Your Strategy The way people are choosing to live moving forward, is dramatically changing. As a result, you should also be changing your criteria if you are serious about taking advantage of the next property cycle. While supply of land in outer areas will remain high, it will be demand that is reduced due to this change. You could have bought anywhere 20-30 years ago and done “ok” out of property. Read more:x The Rules of Property have changed — you must un... Are you looking to invest in property? Maybe to take advantage of all the fright in the market, or maybe later in the year when the COVID -19 problems are... propertyupdate.com.au
0 Reply 18 Views 10D ago
Justprop Team member

Justprop Team member

Prime Minister Scott Morrison has issued a crackdown on public auctions and open house inspections, effective midnight Wednesday 25 March 2020. Following last night's national cabinet meeting, Mr Morrison addressed the media where he confirmed a series of new restrictions are set to be applied as part of the government's efforts to combat the spread of COVID-19 on Australian shores. "In the retail space, auction houses, gathering together in auctions rooms, that can no longer continue," the PM said. "Real estate auctions and open house inspections, that cannot continue." These bans are set to come into effect from midnight Wednesday 25 March. Other newly-banned services include beauty therapy, tanning, waxing, nail salons and tattoo parlours. The PM also used the opportunity to encourage citizens to stay home "unless absolutely necessary". "Going out for the basics, going out for exercise, perhaps with your partner or family members, provided its a small group, that's fine," he said. However, "going outside and going out and participating more broadly in the community" is not, the PM suggested before adding that the government wants Australians to "use their common sense" during this time. "That means BBQs of lots of friends, or even family ... coming together to celebrate 1-year-old birthday parties and those sorts of things, we can't do those things right now," Mr Morrison said. x PM bans public auctions, open house inspections in... Prime Minister Scott Morrison has issued a crackdown on public auctions and open house inspections, effective midnight Wednesday 25 March 2020. www.smartpropertyinvestment.com.au
0 Reply 45 Views 10D ago
Liam

Liam

Sydney’s eager first homebuyers have kept their dreams of property ownership alive in the face of the coronavirus threat, adapting their buying strategies to the pandemic changes sweeping the country. Agents reported interest in virtual property tours and online auction bidding platforms surged over the past week as house hunters sought to avoid large crowds. First homebuyers were among the buyer groups leading the technology uptake and in some instances were the only buyers contending for sales, agents told The Sunday Telegraph. Data revealed activity from first homebuyers – which hit a 10-year peak in December – remained high in the recent month despite uncertainty over how the virus would affect the market. The listing group’s chief economist Nerida Conisbee said government benefits were proving a strong incentive for first-time buyers to stay active in the market. Key benefits included the First Home Buyer Deposit Scheme allowing buyers to use only a 5 per cent deposit and stamp duty discounts for purchases under $800,000. First-time buyers were also among the groups most likely to be encouraged by record low interest rates. The cheapest variable home loan rate on offer is just 2.49 per cent and rates could drop even further following the Reserve Bank of Australia’s decision this week to cut the cash rate to an unprecedented low. “First homebuyers may be just as stretched as everyone else but they still need a place to live,” Ms Conisbee said. “They also, traditionally, become more encouraged when they sense there is better buying.” Ms Conisbee added that while the first homebuyer market remained resilient, it could easily change given nothing like the COVID-19 pandemic had been witnessed before. “It’s hard to know what will continue, things are changing daily,” she said. Read more:x First homebuyers brush off virus threat and steam ... First homebuyers are seizing the initiative at sales as the coronavirus threat begins to reshape the market, with new research revealing the most popular suburbs. www.realestate.com.au
0 Reply 27 Views 12D ago
Joshua

Joshua

According to chief economist at realestate.com.au, Nerida Conisbee, “we’re still very early on in this health crisis and the residential sector hasn’t been significantly affected just yet.” As the situation unfolds, this is what the experts do know. The property market is cautious Conditions are changing daily in the property market and must be considered on this basis, explains Cameron Kusher, executive director, economic research at realestate.com.au. “The challenge facing the housing market, at this stage, is confidence. “If we look at the broader conditions, the cost of borrowing is lower than it has ever been, banks are continuing to lend, and demand is higher than it was a year ago.”  The economy will be buoyed by economic stimulus “If we look forward to Spring, it’s likely the property market will surge ahead on the back of unprecedented stimulus being put into the economy, and a return to normalcy for buyers and sellers,” says Conisbee. “Some commercial property segments have been hit hard, including tourism and hospitality, while some forms of retail, like supermarkets, have benefited in the short-term.” But remember to keep the risks in perspective, she says, and try to stay calm. “Job losses may occur in the short-term, but companies will need to rehire once the pandemic abates and the economy comes back.” Kusher explains, there will be a huge amount of stimulus in place for the housing market, and the broader economy, once the pandemic is over. “It is reasonable to expect that there will be a surge in both demand and supply of properties on the back of these very accommodative monetary policy conditions.” The sharemarket doesn’t reflect the housing market Although finance markets are experiencing volatility, it’s not the economic indicator you might think. “Sharemarket volatility isn’t a great gauge of the economy, it is more a reflection of the level of angst in the market right now,” explains Conisbee. She expects this trend to continue post COVID-19 with specific segments receiving ongoing investment, while others may continue to struggle for some time. “If we look overseas, China is back with retail and manufacturing starting up again, which is a really good sign. “The US has cut rates to zero and quantitative easing has started, while in Italy, banks are holding off on mortgage payments. We may see these measures implemented in Australia,” she says. Don’t change your plans out of fear if you can avoid it Suffering a loss during the lowest point in the market is every property owner’s nightmare. But for those who are feeling rattled by the Coronavirus headlines, they may well find themselves making this critical mistake if they aren’t focusing on accurate and timely sources, says Melbourne buyer’s advocate, Cate Bakos. “For all of the sellers who lose in a down market, there is an inverse winner who capitalises on their situation. Investors could cash in When it comes to investors, many property portfolios will switch to become cashflow positive, Bakos explains. “A cashflow-neutral property essentially means that the owner has a ‘set and forget’ scenario on their hands. “The property is not costing them any net outgoings, and the owner is less likely to feel financial stress that forces them to consider liquidating the asset. Interest rates are at a record low We’ve seen yet another interest rate cut, bringing the cash rate to a record low. Buyers’ borrowing capacity in the current climate is set to be unprecedented, says Bakos. “Heightened borrowing capacity as a result of the consecutive cuts is anticipated to be stronger than the post-election bounce back. “Every 25-basis-point cut we enjoy is a growing percentage of heightened capacity.” Supply is still low While COVID-19 is making the market jittery, the underlying realities of supply and demand will still be with us, virus or no virus, explains Bakos. “Compounded by potential vendor retraction, cancelled auctions, limited stock supply and a growing population from overseas migration, our supply and demand ratio could become quite problematic in the recovery of COVID-19.  Many houses are currently selling for above their reserves Amid this current climate, there have been numerous successful auctions across the country last Saturday. This two-bedroom home at 37 Ellendale Road in Noble Park on the market at $750,000 and sold for $856,000 with multiple bidders. More inside:x A Complete Guide To The Property Market Amid COVID... Does the old saying 'safe as houses' still ring true in the time of the COVID-19 pandemic? We've spoken to the experts to find out. www.realestate.com.au
0 Reply 84 Views 12D ago
Joshua

Joshua

Is now a good time to buy property? Should I hold off and wait for property values to fall further? What’s ahead for our economy will we fall into recession? These are the type of questions in all of our minds and these are the questions on the mind of the many journalists have asked for an opinion over the last couple of days for the various media outlets. And what it looks is that what started as a little cold for our economy has progressed to the flu and now looks more like we’ll get a dose of economic pneumonia. Just look where we are today… Dwindling confidence, a major stock market crash, talk of recession, workplaces closing, major events cancelled, social distancing. What next? Well…panic I guess! There is little doubt that it is serious. While I don’t want to make light of COVID-19, based on my view having been involved in the property market for over 45 years, I believe the impact of this on our property market will ultimately be temporary. Want to take advantage Now, this view may be a little different to what some others are suggesting but remember …this too shall pass. There is no doubt that the virus will cause illness is some people and tragically even kill others. A lesson from the past One of the major lessons I have learned from previous downturns is the importance of taking a long-term perspective which always outsmarts short-term reactive thinking. And for mine, it’s always property fundamentals that really matter and drive our markets in the long term. Things like demographics, supply and demand, affordability, availability finance, and local economic trends. Of course, we all know the old saying, being fearful when others are greedy and be greedy when others are fearful…. So what should you do? In my opinion for those who have a secure job and their finances organised, this is a great time to buy a home or investment property at a price that you were unlikely to be able to get a couple of weeks ago when the property markets in big capital cities were booming and there were more buyers around than sellers. It is likely that human nature will cause many would-be buyers to sit on the sidelines for a little while until things become more clear, which means that sellers will be more amenable to accepting offers rather than holding out for a top price. Remember don’t make long-term decisions like buying a home or an investment property based on the last 30 minutes of news. https://propertyupdate.com.au/is-now-a-good-time-to-buy-property/x Is now a good time to buy property? Is now a good time to buy property? Should I hold off and wait for property values to fall further? What’s ahead for our economy will we fall into... propertyupdate.com.au
0 Reply 18 Views 15D ago
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