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Lessons From the Past

By Robert Green

As our 19/20 financial year drew to an unexpectedly successful close, we couldn’t help but reflect on how very different the final quarter has been in comparison to any other, at least in our lifetimes. Amidst the chaos of stripped grocery shelves, media reports throughout Covid-19 thus far have indicated it’s a time of doom and gloom for the property market. And yet, the reality has been surprisingly positive, at least for the northside of Brisbane.

At the Ray White Aspley Group, we’ve recorded higher numbers of bidders at auction during the June quarter than the equivalent period last year, as well as high auction clearance rates. During the last weekend of June, we hosted a record number of prospective buyers through open homes – an incredible 72% increase over long term averages. Throughout it all, prices have remained stable, while the average time taken to sell has actually fallen.

And all of this activity has not been due to a lower number of properties for sale. In fact, we’re holding more stock than usual, but buyer demand has continued to rise to meet the increased supply. In particular, first home buyers have been out in force, keen to take advantage of the lowest interest rates in history.

So what does all of this mean for the future? Again, the media would have us believe price falls of up to 30% are up ahead. But rather than buy into the negative hype, it’s perhaps more helpful to look to the past for inspiration. A little while ago, respected property analyst John Lindeman released an analysis of property price movements during and post the last global pandemic, the Spanish Flu.

Back then, it was soldiers returning home after WW1 who brought the virus to Australian shores, well after it had already started wreaking havoc across Europe in 1918. As the deadly flu began to spread here, the government took swift action, quarantining overseas arrivals and closing schools, restaurants and theatres and limiting public gatherings. By the end of 1919, there had been three waves of the pandemic in Australia and 40% of the population had been infected, but by slowing the spread, only 15,000 people had died – compared to an estimated 50 million deaths around the world.

Australia unsurprisingly was subsequently seen as a safe haven and as soon as the borders opened, immigration spiked and buyer demand skyrocketed. Property prices boomed in 1919, rising by more 10% each year until 1921.

The similarities in dynamics are obvious.  And while for some reason mainstream media have failed to report on John’s factual insights on the property market during the Spanish Flu, his analysis gives us every reason to remain optimistic.  As stressful as Covid-19 has been both economically and socially, like all things, it will pass. And the lessons of the past can give us a road map for the future.

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