Much has changed in the world in the past six weeks and Covid-19 and its consequences may feel overwhelming.

However, whilst I don’t see an early end to restrictions, I do look forward to a world after this crisis has passed.

Unfortunately, I don’t think there is much in the short term that is positive for property markets as a whole.  (However, there will always be areas that buck the trend – such as Canberra where increased government employment is supporting property prices even in the midst of falls in other areas.)

In a previous newsletter I explored some things that seem clear about the future including:

  • Indebted governments looking for tax increases;
  • Increased welfare dependency;
  • The trends towards working at home and online shopping accelerating to the disadvantage of office and retail property prices respectively;
  • The flow on effects of the wealth destruction we are seeing – unemployed workers, home owners, business owners, landlords, owners of shares and super funds could easily have lost a collective 1 trillion dollars in this country;
  • Massive damage to consumer confidence that will reduce the propensity of most to buy (or sell) real estate for some time; and
  • An exodus from smaller apartments to larger living spaces.

If you are interested, I spent some time discussing these issues with Chris Ilsley on Radio 6PR the other night – click here.

In the longer term, I believe the economy, consumer confidence and property markets will recover.  Even in the midst of a global crisis, Australia has a lot going for it relative to the rest of the world!  The long standing trends of increasing population, restricted housing supply and increased regulatory requirements will all continue to support property prices – aided by historically low interest rates and other forms of government stimulus.

This will doubtlessly create many attractive property investment opportunities in the months ahead.  However, careful due diligence and disciplined investing will be more important than ever.

While many of us are complying with the requirements of social distancing, I am creating two series of short videos that will be more helpful to your property investing future than another Netflix series.  The first series explores key contracts that property developers must navigate.  The second series that covers things that home buyers should know about the house contracts that they are about to sign.

In both cases, I have attempted to identify key issues that commonly cause problems and identify how to avoid the problems by getting the contract right.  It’s a concept that I call “preventative law”.  Hopefully you don’t wait to see a doctor until after your heart attack.  In a similar way, I think proactive advice from a lawyer can help you avoid a legal heart attack!

On a practical level – we are working remotely as a result of the Covid-19 restrictions.  However we do get and action voicemails left on the office phone number promptly!  I appreciate your understanding in this respect.

Lewis O’Brien