COVID-19 AND THE CAPRICORN COAST HOUSING MARKET
During this time of uncertainty, remember this too shall pass, so let’s take a long-term view and look at the positives.
The Capricorn Coast housing market has been stable with many signs of improvements over the last 18 months, and noticeable improvements over the last 6 months, with lower stock levels and increased buyer activity resulting in a significant reduction to the average days on market. The average days on market on the Capricorn Coast is currently sitting at 94, whereas 12 months ago it was taking an average of 119 days to sell a property.
Rental vacancy rates have been extremely low, for the most part @ Real Estate has had no vacancies for weeks at a time over the last few months, when a property does become available it is snapped up quickly. The last rental @ Real Estate had come available was at 29 Jeffries Street Yeppoon, in 48 hours we had 15 inspections and 12 application. Rents have been increasing, 12 months ago the average rent on the Capricorn Coast was $373.00 per week, whereas now the average rent is $406.00 per week. These market improvements are due to a change in supply and demand driven by current and up and coming major projects, strengthen resources sector and record low-interest rates.
Last weekend, Saturday 14 and Sunday 15 March, the @ Real Estate sales team had 7 open homes with 27 groups recorded, and this week we have 3 properties under contract. Despite all the hype around the Carona Virus @ Real Estate are still receiving a high level of enquiries across all sectors of the market.
The Capricorn Coast property market is well prepared for the economic effects of the Coronavirus, as the long-term supply and demand is unlikely to change. People still need to live somewhere. Yesterday, the RBA announced an out-of-cycle emergency rate cut and has reduced the cash rate to a new record low of 0.25%. Offering further encouragement to buyers.
On a national level, the Australian government has the federal budget in balance, giving the government the ability to take action to stimulate the economy. We also have one of the strongest banking systems in the world, meaning our banks are able to offer a high level of support to affected customers and have the resources to endure a slower period if need be. Our isolation as a great island nation has meant that we are one of the later countries to be affected by the Corona Virus, giving us the advantage of being able to learn from the countries that have unfortunately been affected earlier, combined with our world-class health care system, puts Australia in a strong position to fight the Corona Virus in a more effective manner than most. Laying the foundation for Australia to potentially emerge as an even stronger country economically.
While some view the Australian Dollar falling to be a sign of weakness, it actually gives us some fantastic advantages. Traditionally the Australian economy benefits from a low Australian dollar, helping farmers, the resource sector and all export industries and encourages us to buy locally produced items further growing our economy. Although on Monday 16 March the stock market experienced the biggest fall since 1987’s Black Monday stock market crash, the rest of the world is experiencing similar issues. On a positive note, traditionally in times of economic uncertainty Australian investors have invested heavily in the property as a safe haven from other more volatile markets.
Additionally, the federal and state government has already announced stimulus packages with more expected to follow, we have seen positive benefits of such support in the past, for example, the funding received as a result of Cyclone Marcia helped to fund some great projects on the coast benefiting the community. Favourable, economic conditions often follow after an unfortunate event, this can actually be seen time and time again in history. This is likely to be a time of massive change and innovation.
Making now actually a great time to invest in the Capricorn Coast property market as the shortage of housing is set to continue with rental vacancies at record lows.
Our hearts and prayers go out to everyone affected by the virus, it’s a time to come together as a community. Remember to practise good hygiene and shop local!