Australia is among the top three countries in the world best placed to ride out the economic fallout of COVID-19, with experts predicting property will signal the recovery.
A report by PRD Nationwide called “Developed Country Response to COVID-19”, looked at all G20 nations and their packages designed to bolster economies and jobs (in USD).
Per capita Australia ranked second, behind Germany, as being the best placed nation to ride out the economic downturn, while as a percentage of GDP it ranked third, surpassed only by Germany and Japan.
PRD chief economist Dr Diaswati Mardiasmo told The Courier-Mail that the numbers showed that Australia’s fiscal policy had put the country in a strong position for recovery.
Stimulus Per Capita (USD
United States $6,077.83
(Source: PRD Nationwide)
“Against other developed countries Australia’s stimulus package as a percentage of 2019 GDP (14.4 per cent) is on the higher end, above the US and Canada, and significantly higher than our neighbours New Zealand,” Ms Mardiasmo said.
“From a stimulus per capita perspective, Australia is in a strong position, only second to Germany. We are well ahead.”
She said taking the number of jobs lost (750,557) and the stimulus package as a percentage of 2019 GDP, Australia had a strong ability to provide the population financial assistance. “In some instances more favourably compared toother countries.”
It was the stimulus packages and ability of the country to keep people employed in the property sector that underpinned the relative strength when compared with other parts of the economy that had been dramatically hit, she said.
Simon Pressley, the head of Propertyology, a buying agency, expected the crisis to mirror those of the past, where the rebound began “with a real estate surge before anything else”.
He said shelter was the one thing 25.5 million Australians had in common, and the way to build confidence en masse was around the value of people’s homes.
“A strong property market will again lead Australia out of this latest coronavirus health crisis, potentially starting as soon as six months’ time.”
Mr Pressley expected the coming months to lead to record low transaction volumes, coming off supply that was already tight in the lead-up to the epidemic.
“Let’s not forget that Australian real estate already had a significant shortage of properties listed for sale before this virus tipped our communities upside down.”
Yet unlike the previous GFC, he said, this time credit policy was so tight in Australia that the quality of loans approved in the past few years was “exceptionally high”.
He said the variety of support packages plus record low interest rates and empathetic banks “will cushion property owners through this and greatly minimise the need for distressed residential property sales”.
Number of Job Losses
(Source: PRD Nationwide)
“As winter becomes spring, and spring becomes summer, we will all come bursting out of our cocoons with a renewed sense of freedom. There will be an enormous release of pent-up demand for goods and services. For property it’s likely to be akin to a flock of seagulls fighting over a chip.”
Among the financial assistance being provided is the JobKeeper payment ($1,500 a fortnight for business ownes), JobSeeker payment ($550 fortnight for those who have lost their jobs) and the coronavirus supplement ($550 fortnight, tops up the JobSeeker payment).