The Good, The Bad & The Ugly - What will now happen to the Property Market? Robert Klaric - The Property Expert

I have been working since the age of 16 years old... I am now 53 and have over 32 years experience in the Real Estate and Property industry and having worked through Australia's Two Recessions, the first one in 1982 (where my family lost everything as the Banks moved in and evicted us from our Restaurant and our family home!... I still carry the 'Emotional scars' from this challenging time.) and the second recession in 1990 and let's all not forget the GFC - Global Financial Crisis in 2008.
In the last few weeks Leonie and I, have received so many calls and emails asking for HELP!... People just needing some 'Personal and Property' advice on 'How to Survive' this uncertain times both 'Emotionally & Financially' and what we need to do to get through this Corona Virus disaster we now have in 2020.

The Big Question everyone is asking?... What will happen to the Property Markets?

My Answer?...

We now have a 'Three Tier' Property Market!... 'The Good, The Bad and The Ugly'.

The 'Good' Market...
The 'First Tier' in our Property Market (And also the smallest Tier)...
We now seeing the 'First home' buyers entering the market with a much bigger selection of properties to buy from and at significantly reduced prices in the lower price range of $500,000 to $1 Million price range (With the help and funding from Mum & Dad). 
For the Sellers, we now seeing a clear distinction between the 'Recession Proof' sought after suburbs that are within 10 kms of the Sydney CBD and then the harder hit suburbs in the Western and Southern Suburbs of Sydney. The stock levels in the sought after suburbs and areas remains low and the buyer demand remains high. Examples of some Sydney 'Recession Proof' suburbs are Bondi, Coogee, Randwick, Manly, Mosman, Hunters Hill, Strathfield, Annandale and Balmain where the prices are remaining stable. We are experiencing a small decrease in the property prices at the lower end of the market and the level of Price reductions are around 10% during this Covid19 crisis for the property transactions that are still currently occurring.

The 'Bad' Market...
The 'Second Tier' market, which is the middle class of Australia. 
Buyer activity in the mid market from $1.5 million and above has reduced significantly and buyer confidence from the 'Middle Class of Australia' is very low due to the High increase of unemployment now and the majority of business owners experiencing a massive reduction to turnover and sales. 
The reduced number of property sales transactions during the early stages of the Covid19 Pandemic has seen Price reductions of between 10% to 20% to see properties finally transact and get sold in this current marketplace. For many Sellers now already experiencing this first hand with the property downturn and finding themselves having to sell their property and meet the current market price due to the difficult circumstances they have found themselves now in due to having purchased already before selling their property, unable to meet loan and financial repayments and loss of Employment.

The 'Ugly' Market...
 
Auction Clearance Rates were at 80% Plus in February earlier this year, and now the clearance rates are less than 40% in April 2020 and with the Covid-19 Real Estate industry changes to Public Auctions and Open for inspections (Only Online Auctions and limited private buyer inspections permitted).
The Reality is that Australian economy is quickly driving towards another 'Recession' due to the Bushfires, Corona Virus Crisis and Business disruption (if we are not already in one in my opinion!...) due to many small Businesses being smashed and lack of confidence from the maketplace.
The Unemployment Rate will quickly head towards 10% by the end of 2020 and Bank Funding & Finance will be extremely difficult to obtain for the vast majority of Australians for business, property investment and home ownership.
The Property markets across the major capitals of Australia will experience a Property decline of up to 20% (excluding the sought after and 'Recession Proof' Suburbs) and if not greater in the 'Vertical Suburbs' (The Suburbs with multiple High rise Apartment blocks} around Sydney, Melbourne and Brisbane where we will see a large oversupply of properties for sale, new High rise apartments coming onto the market later this year and significantly reduced numbers of buyers willing to commit to purchasing property. Unfortunately many small 'Mum & Dad' investors will not be in financial position to hold on to investment units as they are not receiving enough rental income to cover minimum loan expenses due to the oversupply of rental apartments that will become available. 
The reality is that 2020 will be a 'Rollercoaster Ride' for the Property Market, and Unfortunately we will see a further market downturn in 2020 and it will progress into next year 2021 due to the 'Recession and High Unemployment'.

Please feel free to call or email me on 0411622257 to discuss confidentially any 'Help' you may need during this Covid-19 Crisis and remember that we are all in this together!... 
'Stay Home, Stay Safe and Stay Healthy'. 

Kind Regards,
Rob & Leonie Klaric
The Property Expert International