How Coronavirus affect property values

Property prices are always a function of supply and demand. While we can expect demand to fall, it is a fair bet that people will also be reluctant to sell property at this time, especially if their observation is that prices have fallen. It is therefore quite possible that any fall in demand will be, at least in part, offset by a fall in supply. That said, it would be a brave person who assumed that prices won’t fall at all. Given that the entire economy will shrink, property prices will almost certainly come off the high prices that were being reported for March 2020 (record prices in many places, in fact). Of course, falling prices are not bad news for everybody. That is the whole point of markets. People who have yet to purchase a property will welcome a fall in purchase prices – especially if their income has not been negatively affected by the Coronavirus and its impact. The range of “people who have yet to purchase a property” might include people who are prospective property investors. People who are yet to invest, or who own just one residential investment property, may also benefit from any downward move on prices if their intention is to increase their property portfolio. Time will tell and, if you thought predicting the share market was hard at the moment, be assured that the property market is even harder to predict, especially long-term. We can be sure, though, that this is a good time to keep a close eye on the market. If the idea of property investment appeals to you, or if you are yet to buy your own residence, this is a particularly good time to think about how you might use these next few years to add to or commence your property portfolio.