The COVID-19 outbreak has tainted the outlook of global economies and this could potentially compel investors to go after low-risk asset classes like property even with the slow population growth, according to an expert.
Tim Reardon, chief economist at the Housing Industry Association, said the coronavirus pandemic might extend the losing streak in population in the coming months.
Latest figures from the Australian Bureau of Statistics show that during the September 2019 quarter, the population grew by just 1.48%, down from the previous quarter's 1.53%.
"This decline is likely due to tighter visa restrictions and the softening of the national economy during 2019," Reardon said.
Population growth in all states, except Western Australia, slowed. Reardon said the COVID-19 outbreak will likely curtail strong gains in the coming months, especially given the economic shocks.
While a moderation in population growth will likely slow residential building over the medium-term, Reardon said it is highly likely that investors will still invest in low-risk asset classes like property.
"If this shock is short-term, investors may feel compelled to redirect funds from high risk to low risk asset classes. This may mean that investors move from the share market into bricks-and-mortar investments such as residential property despite a lack of population growth," he said.
In a separate analysis, Eliza Owen, head of residential research at CoreLogic, said property has historically fared well against adverse economic shocks compared to other asset classes like stocks.
"If monetary and fiscal stimulus can adequately support business and household income amid the slowdown, then the next few months could see a sharp contraction in sales volumes, but not necessarily dwelling values," Owen said.
Top Suburbs :
east victoria park
tweed heads south
Get help with your investment property
Do you need help finding the right loan for your investment?
When investing in property, it is important to make sure that you not only have the lowest available rate that you can get, but also have the correct loan features for your needs.
Just fill in a few details below and we'll then arrange for a local mortgage broker to contact you and work out what features or types of loans are right for your needs. We'll even help with the paperwork. Plus an appointment is free.
We value your privacy and treat all your information seriously - you can check out