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Mortage Broker , Sydney Region

How could the Coronavirus impact the Australian economy and property market?

7Mo ago 0 Replies 292 Views
Coronavirus – impact on Australia’s economy and property market

As the Brexit and the US/China trade war are now far closer to being resolved, which is good news for global economic stability. However, seemingly as soon as this has been resolved, the coronavirus is set to be declared a epidemic due to the ease at which it appears to be spreading worldwide.
If it can’t be contained quickly, then the impact on economic growth could be very bad news. If we look at the impact of SARS in 2004, the virus led to a drop in GDP for a quarter but then the next quarter, economic growth accelerated as the Chinese Government pushed forward a stimulus program to get the economy moving again.
Perhaps this will happen again and if so, it is unlikely to have too much of an impact on Australia.
The impacts on the property market are twofold. The first is the impact generally on pricing and the second is the impact on foreign demand, in particular from China.
If a SARS-type economic impact occurs, then the impact on pricing will be quite minimal. It is unlikely that one quarter of economic decline in China, followed by a big jump would result in a substantial loss of employment in Australia.
If the impact was more severe and Australia’s unemployment rate started to rise rapidly, then this would be bad news for households and bad news for prices.
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