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PRDnationwide is adamant that investors interested in capital cities shouldn’t be concerned about the coronavirus outbreak, noting that present data is showing no severe effects on long-term market viability.
In an update to consumers, PRD encouraged interested buyers to invest in property now, despite the current economic climate.
“COVID-19 has taken us all by surprise and its power has rapidly weakened our economy over the past three months. So much so that the Reserve Bank of Australia (who were positive in their projection based on property market data and held the cash rate stable in February 2020), cut the cash rate in March 2020,” PRD said.
“The tourism and education industries were the first affected, with tourists canceling holidays due to travel restrictions, and education facilities experiencing a reduction in enrolments.
“...Airbnb data for Sydney and Melbourne shows that since December 2019, there has been interesting trends for ‘duplicate’ and ‘unique listings’ for the ‘whole house only’ option. Duplicate listings refer to a specific property listing ID number that is found in the subsequent month – for example, a property listing ID that was present in January 2020 and February 2020 Airbnb data would be classed as a duplicate listing.
“In Sydney, there has been an increase in duplicate listings between December 2019 and February 2020. In December 2019, there were 25,374 listings of which 22,865 were duplicates from November 2019. In February 2020, there were 25,306 listings of which 24,007 were duplicates from January 2020.
“This suggests that properties from previous months are still actively listed on Airbnb and have not been moved to the long-term rental market. This data potentially demonstrates that Airbnb owners are waiting longer for their properties to be rented.”
According to PRD, Melbourne data shows the same “duplicate” and “unique listings” trend as Sydney.
“Not surprisingly, unique listings between December 2019-February 2020 have declined, suggesting new investors are wary of adding to the Airbnb market, and old/current investors are remaining,” it said.
“Vacancy rates in both Sydney and Melbourne continue to decline. In December 2019, vacancy rates for Sydney and Melbourne were 3.6 per cent and 2.5 per cent, respectively, and in February 2020 they were 2.9 per cent and 1.9 per cent, respectively. These figures are both under the Real Estate Institute of Australia’s healthy benchmark of 3.0 per cent and a declining trend suggests healthier rental demand.
“Presently, data shows that investor confidence in capital cities should not waver as there is a healthier vacancy rate in both Sydney and Melbourne. Despite the decline in unique listings in the short-term rental market, which may suggest the property has been added to the long-term market instead, there does not appear to be any severe effects on the long-term market.”