The REIQ says there is hope the property market will recover relatively quickly. (ABC News: Liz Pickering)
For Queensland mortgage broker and property consultant Carolyn Walshe, it is not a matter of if, or when, the coronavirus will hit property prices, but by how much and for how long.
- COVID-19 will put a dent in record median house prices in Queensland
- Banks will be reluctant to lend, as people’s ability to repay loans also looks uncertain
- REIQ’s immediate concern is tenants facing eviction for not being able to make their rent
“You’d have to expect that they’re going to fall,” Ms Walshe said.
“The question is going to be just exactly how much — I think the smartest thing that people can do right now is just to hold back and wait and see what happens over the next few months.”
The latest figures show Queensland reached record median house prices for Brisbane, Noosa and other parts of the state in the last quarter of 2019.
Real Estate Institute of Queensland (REIQ) chief executive Antonia Mercorella agreed that COVID-19 would put a dent in that.
“Inevitably we will see the property market impacted by the coronavirus — I think it would be incredibly naive to think otherwise,” Ms Mercorella said.
“We know that a large volume of people will lose their jobs during this time.
“We know that it will completely erode confidence and those things — security and confidence — are very much key to the property market.”
“Real estate auctions and open house inspections, in particular open house inspections — that cannot continue,” Mr Morrison said.
He said that from midnight tonight they would not be allowed.
Lenders, investors cannot foresee what’s to come
Ms Walshe, who also advised clients through the global financial crisis — suggested the forced shutdowns of parts of the economy, the restrictions on travel and the massive queues for Centrelink all added to the uncertainty.
“The list of instructions that people have to live under is breathtaking, so until we see some endpoint to all of that, it’s going to be very, very difficult to see exactly where the other side is,” Ms Walshe said.
Ms Walshe said the fact the Federal Government had moved the budget from May to October showed neither it nor investors, could foresee what was to come with any certainty.
“I don’t think anyone can have a lot of confidence at the moment until we see things that are far less alarming,” Ms Walshe said.
“Therefore, less property sales will complete until we have some confidence returned to the market and people are back at whatever semblance of normal work is.”
She said banks would be reluctant to lend, as people’s ability to repay loans also looked uncertain.
“Lenders are now going to be seriously looking at [the] possibility of there being lower numbers of borrowers who are in occupations where their income can be absolutely guaranteed,” Ms Walshe said.
Ms Mercorella said while some investors would be reluctant, others might pounce.
“We will see some investors perhaps getting cold feet and making a decision to suspend that,” Ms Mercorella said.
“But similarly, we will see some prospective investors being quite bullish about it and actually looking at this as an opportunity and probably pouncing on what’s available to try and secure a property at a better price, at a lower price.”
Ms Mercorella says while some investors will be reluctant, others might pounce. (ABC News: Liz Pickering)
Stay up-to-date on the coronavirus outbreak
Renters and landlords also to come under strain
Ms Mercorella said the REIQ’s immediate concern was tenants facing eviction for not being able to make their rent.
“Around 35 per cent of the Queensland population rents,” she said.
“The vast majority of that supply comes via the private investor, so given the predicted job losses, we are concerned about the impact that will have on a tenants ability to make their rent obligations.
“We don’t want to see renters being evicted on account of non-payment.”
She said the REIQ welcomed any support governments could give to tenants.
“Equally, what we need to be cognisant of is that the vast majority of that rental supply is coming from private investors — mum and dad investors — and they will have their own obligations at the other end to the bank.” Ms Mercorella said.
“So the challenge will be how we protect tenants in this in this environment, but also supporting owners who ultimately — if they don’t meet those obligations — will end up defaulting on mortgages, and ultimately having to sell those properties and losing those properties, which will mean that we all lose.”
Ms Mercorella said there was hope the property market would recover relatively quickly.
She said the Queensland market was robust and recovered well from the global financial crisis.
“Again, we bounced back from the GFC rather well, but I but I do expect that this will be far more severe than that,” she said.
“It will also depend on how long we’re in the situation for, so it really is crystal ball gazing at this stage.”