Market Essentials - March 2020
/This Month in Review
The novel coronavirus (COVID-19) and its potential negative impact on the global and Australian economies is dominating the news at the moment.
This month the RBA pushed forward the decision to cut rates to a record low 0.5% to help stimulate any downturn that COVID-19 may be causing throughout the economy.
If history is any guide, demand for property increases during times of economic uncertainty. How long the uncertainty associated with COVID-19 will last is unknown at this stage.
However, the Australian share market has already been negatively affected, with 6% being wiped off the value of Australian shares in the last week of February (though the overall market is still slightly higher than it started the year).
Demand for Australian property could also be positively impacted by the early high level of interest currently being shown in the federal government’s new First Home Loan Deposit Scheme.
The Scheme commenced on January 1 this year to help first home buyers with a deposit of as little as 5% to avoid the cost of lenders’ mortgage insurance. In this financial year, 6,500 of the 10,000 places available in the Scheme were already allocated to first home buyers by mid-February. Another 10,000 places in the Scheme will become available from July 1.
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The Market Essentials Report is compiled by Buyside on behalf of Loanscape. Founded by Josh Masters, Buyside are registered buyer's agents with on the ground expertise in the Sydney and Brisbane property markets.
