Australia enters first recession in 29 years, yet experts remain optimistic about the property market
The COVID-19 pandemic and bushfires at the start of the year dealt a huge blow to Australia. As of yesterday, official figures have confirmed that the Australian economy has officially felt the impact of both devastations, with its GDP shrinking by 0.3% in the first quarter of 2020.
Bruce Hockman, Chief Economist at the Australian Bureau of Statistics (ABS) said: “This was the slowest through-the-year growth since September 2009 when Australia was in the midst of the Global Financial Crisis and captures just the beginning of the expected economic effects of COVID-19.”
Private demand fell by 0.8 percent, and net trade contributed only 0.5 percent to the total GDP. Imports of goods and services fell by 3.9 percent and 13.6 percent respectively, while Australian exports dropped by 12.8 percent.
Lockdown restrictions, a slowdown in tourism and rising unemployment from COVID-19 and the bushfires pushed the economy to recession. However, the Morrison government’s introduction of two stimulus packages to keep Australians financially protected has seen some results: gross disposable income increased by 6.2 percent and household saving to income ratio rose to 5.5 percent.
COVID-19’s impact on Australia's property market is still one that is difficult to predict. Nevertheless, given the resilient nature of Australia’s housing market, experts are generally optimistic that Australia will be back on track faster than most.
