History has shown when there are corrections in global stock markets, Australian property becomes a port in the storm.
As the stock market is ravaged by fears of coronavirus and the Australian dollar dips to its lowest levels in many years, Mark Williams of WILLIAMS MEDIA ponders the reactions of previous disasters. “This week we have seen a flow of capital to property,” said Mr Williams. “Property has become a safe haven in the past whenever there is a stock market correction. We saw this in the recession of 1987, the Asia crisis of 1997 and the Global Financial Crisis in 2008.”
Mr Williams said indications this week showed that people were again moving their money to property when stock markets suffer significant corrections. “In the past three days we have seen significant competition with above reserve results reported for both residential and commercial properties nationally.
“We saw strong bidding results at last weekend’s auctions. Tempered by the fact these auctions are the result of buyers and sellers committed to transactions weeks before the pandemic was announced. However, they continued on with the knowledge of the stock market’s worst losses in many years and coronavirus impacts on business starting to take hold.
“Property buyers have access to the cheapest money in our history as interest rates to borrow are so low,” continued Mr Williams. “Historically we have entered stock market corrections when interest rates have been high, and people would move their money into banks chasing yields. With rates so low during this correction, there is no return on money by moving it into cash accounts.”
With the challenge of coronavirus for the real estate industry, Mr Williams said the use of technology was going to be the point of difference. “Change has been forced upon the sector overnight and smarter agents are utilising this period of change by upgrading their systems to use technology to its full capacity,” added Mr Williams. “On the other side of COVID-19 we will see real estate practices being much more efficient through the adoption of PropTech.”
Over the last three years, Besser + Co. have developed systems and invested in technology to ensure that our Property Management & Sales departments are paperless, and all of our systems are cloud based. These processes ensure that we can continue to provide our clients with a high-end boutique service with absolutely no reduction in efficiency or quality.
Any questions relative to the changes we are making or would like to discuss your property goals in more detail, please feel free to contact Dion Besser on 0412 556 443.
Information source: REIQ