Mij Gibson Oct 21, 2020
The RBA says the lack of huge amounts of international students coming into Sydney has caused vacancy rates of short-term rentals to grow. A long period of vacancy without rental income could lead to property owners being unable to service their mortgages.
The extended international travel restrictions says the Reserve Bank of Australia (RBA) in its Financial Stability Review will eventually force down house prices as rental vacancy rates explode in Sydney and Melbourne.
This could lead these property investors to sell their properties en masse that would create increased supply over demand. Leading to a fall in house prices.
Fortunately, Marsden Park is not known for short-term rental properties so the decrease in demand from international tourists and domestic business travellers should have little impact on its property prices, which have remained stable thus far, during the pandemic.
National data says 9News shows that house prices in Australia are currently 1.5 per cent below their peak in April 2020, and new property listings are at a broadly similar level to where they were last year.
However, the RBA suggests that extended periods of vacancies could lead to mortgaged investors struggling to afford repayments, and deciding to sell their properties which has the potential to exacerbate housing price falls, particularly in areas with more investor properties.
Prime Minister Scott Morrison told 9News that Australia has always had more demand than supply, and this will keep prices strong.
"The impacts from the COVID-19 recession are obvious. Whether it's programs like HomeBuilder and others, there will always be an excess of demand over the supply of housing in this country," said Mr Morrison.
"Always has been. And that's what has fundamentally driven house price values all around the country. And that is still true today. There is still a surplus of demand over supply."
Head of Research at property data firm CoreLogic Eliza Owen stated in her Federal Budget summary that Australia is likely in a "first home buyer sweet spot", and prices are unlikely to fall.
Ms Owen also said that the RBA had left the “cash rate on hold in October ahead of the budget, but hinted in the final sentence of the statement on the decision that 'additional monetary easing' was possible".
This lower interest rates, continued Own, “together with easier access to housing credit could create further housing market demand, given prices have historically increased against a lower cost of debt and greater availability of housing finance options.
This is good news for investors and first-home buyers looking at properties in Marsden Park NSW.