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The current trajectory of house prices is proving the resilience of the Australian property market, even amidst a global economic downturn — a trend that can only be interpreted as a positive; however, a market expert at the Property Investment Professionals of Australia (PIPA) has warned that “unscrupulous operators” may look to take advantage of the current market conditions.
Peter Koulizos, chairperson of PIPA, said property buyers and investors should make sure that they only work with trusted property investment professionals.
"Unfortunately, during strong market conditions, history also shows us that unscrupulous operators also emerge," he explained.
Koulizos said whether a buyer is looking for a property investment adviser, mortgage broker or accountant – "essentially any professional involved in the property investment process" – it is a must they are certified by reputable associations or institutions.
Working with a trusted professional has become particularly crucial as the property markets continue to show signs of recovery from the impacts of the COVID-19 outbreak, Koulizos added. The latest figures from CoreLogic show gains in prices across capital cities in November, with the overall dwelling value index rising by 0.8%. Annual gains also remained robust and have yet to dip into the red, despite the pandemic.
Further, recent research from PIPA has revealed the annual median prices in capital cities increased significantly five years after the four recent economic downturns in Australia.
One of the most substantial turnarounds recorded was in Sydney, where prices shot up by 100% five years after the 1973-1975 recession. Sydney also led the recovery from the global financial crisis in 2008-2009. In 2014, property prices in the city rose by 39.7%.
"For some reason — even though our analysis looked at every downturn or recession over the past 50 years — plenty of people were still expecting property prices to fall off a cliff this time around," Koulizos said.
There are several factors that continue to help insulate the impacts of the COVID-19-induced recession on housing prices, including the slew of government assistance in the form of cash grants and incentives and the low interest rates, Koulizos explained.
"Lowering interest rates to support home ownership but also to encourage more spending generally has long been a successful policy during economic downturns, coupled with other stimulus measures," he added.
"It has always been a priority to protect the wealth of everyday Australians whose biggest asset is usually their homes."
