Economy will recover from health crisis hit: expert
Despite current uncertainties, experts assure Australians that the national economy has the key fundamentals in place to make a strong recovery in the event of a breakthrough in the global coronavirus (COVID-19) pandemic.
KDL Property Group Managing Director Kent Leicester said COVID-19 has become a life-changing health crisis, but lessons have been learned from the global financial crisis a decade ago to find a way forward when the virus can be contained.
“While we are in uncharted territory as COVID-19 spreads around the world, the response from governments, the Reserve Bank of Australia and the major banks is encouraging as we battle these unprecedented headwinds,” Mr Leicester said.
“A total of $189 billion is being injected into the economy by all arms of the government, with more expected to assist business, keep people working and help those hit hard by the financial impact of COVID-19.”
“A lot was learned [from] dealing with the GFC, in the end, which did not impact as badly on Australia compared with the rest of the world.”
In response to COVID-19, the RBA has cut official interest rates to a record low of 0.25 per cent.
At the time of the GFC in August 2008, the RBA cash rate was 7.25 per cent and was lowered to 3.0 per cent by April 2009, still way above current levels.
According to the Queensland-based property developer, borrowers had lived through a decade of low interest rates with no likelihood in the near future of rates increasing significantly.
“This is an excellent environment to enable investment in the recovery phase and property will be a safe haven with the share market experiencing so much volatility,” Mr Leicester highlighted.
“When the health crisis is under control, people, particularly investors and residential first home buyers, should feel comfortable with what should be an amazing environment for growth.”
According to the latest UBS real estate update, interest rate cuts, strong owner-occupier demand and attractive site acquisition opportunities have provided an upbeat outlook for property developers despite COVID-19.
Mr Leicester said KDL Property Group, which has residential and commercial real estate projects throughout South East Queensland, has also been receiving positive feedback from customers.
“Businesses have been proactive in changing the way they work under COVID-19 and are doing what is required.”
“Our customers are trying to be business as usual. We are still looking to acquire sites and are continuing to work with councils on planning matters. We are thinking about the next two to three years and are viewing COVID-19 as a temporary situation we can overcome.
“We are really seeing people taking a long-term and mature view of the market.”
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