The hysteria surrounding the coronavirus and its potential impact have already caused major impacts upon some grocery lines (toilet paper and hand sanitiser in particular) and on world share markets. What is going on? Why is it happening? And will the nervousness apparent in the stock market have a flow on to the housing market and the wider economy?
The nervousness in the stock market is due mainly to the Australian economy’s reliance on China for many of its goods. If the supply chain is broken, this could result in product shortages, production slowdowns and potential staff layoffs. Adding to this nervousness is the realisation that if the virus reaches pandemic proportion then the very fabric of the economy will be threatened as work will be severely impacted and casual workers in particular could be placed in severe hardship.
The stock market can be particularly volatile in times of uncertainty, and the market falls and corrections are to be expected in this time – what is a little harder to gauge is the impact that the virus may have on the housing market.
At this stage no one really knows how the virus will affect the property market in the long term, with effects so far being minimal. However, the longer the situation continues, the more likely it is to have an effect on the property market. With this in mind, we can in all likelihood expect some uncertainty and fear to impact the owner occupier sector of the market, but this may be offset by canny investors looking to take advantage of cooling demand – there is even some speculation that there could be a spike in demand from prospective Chinese and Hong Kong residents who see Australia’s capitals as safer, healthier alternatives.
Whatever the case, one thing is certain – that uncertain times present opportunities and risks. If you need help with your financial planning and or housing finance give Australian Finance Hub a call to discuss your needs.