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Property prices after the crisis

By Paul Nees
Historical economic recoveries have shown a steep rise in property prices in Australia. The property market is typically the first sector to experience rising prices after an economic crisis.
During the global financial crisis Australia was a worldwide exception to avoid a recession, but nevertheless the real estate market experienced strong price growth between 2008 and 2010 during the aftermath of the crisis.
The longer the economic and social disruption from COVID-19 persist, the greater will be the risk of asymmetric effects on housing (and household finances). The tipping point may be longer than 6 months given most support measures are in place for at least that long, these support measures are acting as a parachute for the property market currently.
How sharp will the price increase be after the Coronavirus is over?
No one can exactly predict how sharp the increase will be but there are several factors to have an effect on it. Looking past the crisis, the significant easing in monetary policy, which is likely to be in place for a few years, could see a swift rebound in established housing activity and prices once the virus passes. Repayment affordability has improved markedly as interest rates have fallen.
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