From upheaval to opportunity: How COVID-19 has changed property investment
Good and bad, great change in our society always has knock-on effects, and the long-term impacts of the COVID-19 outbreak will be no different, especially when it comes to investing in property.
But how will the coronavirus change how we live, where we live and ultimately where we should be investing in property?
Trends in economics, population growth and behaviour all impact real estate. Recognising those patterns and understanding how and why they might change how we live, is key to staying on top of property investment and future financial success.
Here we look at some of the ways the global pandemic is likely to change and influence property prices and demand.
FIRST…WE HAVE TO UNDERSTAND BASIC ECONOMICS
To grow our economy we need certain things, the first of which is a bigger population. Why?
More people = more spending = a healthier, growing economy.
Right now, Australia has a “business plan” to grow the population to 40 million people by 2051. Before coronavirus, the country aimed to achieve that by bringing 160,000 new residents into Australia each year, via international immigration. But now the borders are closed, what’s next? How can we increase our population and build our economy?
Just like in real estate, Australian migration has to play the long game.
SECOND…INTERNATIONAL MIGRATION WILL CHANGE, NOT DISAPEAR
Firstly, with students. While university students are no longer living and spending here, an Australian degree is still a gateway into a future life in Australia, and all of those students are now studying online until they can physically get here. They’re still in the game.
Secondly, returning expats. Cashed-up Aussies who went to Europe and the US, are now returning. Compared to the rest of the world Australia is handling and surviving the coronavirus well and home is starting to look like a haven for Aussies overseas.
As they return, they bring their earnings with them and are looking to buy or rent property, meaning an immediate boost to the economy and property growth. Demand increases, prices go up.
And it’s not just Australian expats who still want to call Australia home.
THIRD…THE BOOM OF ‘BRAND AUSTRALIA’
While no one can deny it’s been tough, compared to other nations Australia is coming through the COVID-19 pandemic swinging like a champ, and our brand appeal has gone through the roof for a number of reasons.
The mega-cities of more than 10 million people (think New York) have fared worse than our medium-sized cities. The virus has killed less people here, decimated less jobs and wrought less havoc. Suddenly a smaller city which allows you to work and live well and more safely, is more appealing.
Australian cities also have a reputation of high liveability, meaning they’re nice places to live, to work and to play. And this is another important by-product of the pandemic – people have changed their ideas about how they want to live.
FORTH…LIVEABILITY MATTERS MORE
So, what does liveability really mean and how does it influence property growth. What does a liveable suburb or city have?
Prior to the pandemic, a high factor of liveability would have been proximity to the CBD. Living close to work meant less commuting time to the office. Now more people are working from home that factor has lessened considerably.
Other liveability factors include things like:
- Am I walking distance to what I want to do ie restaurants, beaches, playgrounds etc?
- Is local transport good?
- Is housing affordable?
- Are there employment opportunities?
- Is there enough green space?
Some of the more social, less economic, aspects of liveability (green spaces, a good walking culture) also contribute to something called wellness migration or wellness community – one of the biggest current driving forces in real estate, and something that has inevitably increased due to the health threat of COVID-19.
Wellness, how long we can live and how healthy we are, is influenced by the quality of where we live. Less commute means less stress. More green space means walking is easier, which equates to better health. Communities with an underbelly of good nutrition, exercise and overall wellbeing will be more appealing, so demand will increase and capital growth will rise.
So, overall, what has the coronavirus done to real estate growth and property investment?
- Changed the migration model
- Given “brand Australia” a boost
- Made liveability and wellness real estate priorities
Real estate is ever changing and morphing, but right now it’s doing that at a fast rate. Stay across current and future trends in real estate so you can make educated decisions on where to invest in property.
PROPERTY INVESTMENT DURING COVID 19
Good property investors are nimble and adapt fast. They stay informed and enrol a team of experts to help them excel in times where others can’t. To find out how you can be one of those people, we’re running a free a property investing seminar.
Here you’ll be equipped with the tools, resources and support to thrive, and not fall behind on your path to financial freedom – whatever that may look like for you.
Book your spot now and find out what you need to know about the current market landscape and how you can make it work for the ultimate wealth creation opportunities.
Co Founder Positive Real Estate