Property coasts along nicely, but for how long?
A Noosa property market expert and academic is warning even a robust real estate market like the Sunshine Coast is now in uncharted waters thanks to the uncertainties of the COVID-19 pandemic sweeping the globe.
Dr Steven Boyd of CQ University’s Noosa campus this week helped host a webinar which attracted about 280 valuers including Tim Lawless, head of research for CoreLogic Asia Pacific.
Dr Boyd, the head of the university’s property studies and a specialist retail valuer, said the university joined forces with the Australian Property Institute to deliver a national webinar titled “valuing in the current climate”.
“The one real theme is even thought there is still a significant level of uncertainty, the market is looking good and prices have held up pretty well,” Dr Boyd said.
“The housing market has not been immune to the effects of the COVID-19 pandemic thus navigating the impacts of changing house values is more complex than ever for both valuers and buyers.”
He said the coast “whether it’s Noosa or Coolum” always had the advantage of their “most beautiful environment” to attract continued buyer interest and be the envy of other markets.
“I guess our real concern is just the longer term impact on the global economy,” Dr Boyd said.
“We have been resilient and we do know that prices up here don’t correlate with earnings because people are often living on capital that they’ve had,” Dr Boyd said.
“And a lot of capital is still tied in to things like different shares attached to the global, so we are nervous about that, there’s no question.”
He said Australia has not encountered a recession since 1991, as a consequence individuals younger than 50 would not have experienced an enduring decline in Australian house prices.
“But as long as we’ve got a longer-term ability, or a medium term-ability to pay the mortgage, then the prospects are pretty good.
“The parameters are looking nice with interest rates and with everything else.
“There have been a series of forecasts from senior economists in the government and banking sectors to the decline of housing prices – some extend to price drops of 20 per cent.”
Dr Boyd said with an extended downturn in the global economy, there could be regions that realised falls of that nature.
“This is particularly worrisome when you consider the home is often the asset mortgaged to finance business ventures,” he said.
“In that way, house price reductions can have a real impact on the ability of small business owners to sustain their business or recruit more staff.”
In comparison, Dr Boyd highlighted some industries, and innovators were thriving in these COVID times.
“There are regional markets where increased activity in some resources and rural sectors have led price increases,” he said.