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On the other hand, there could be a lot of Chinese and other Asians (Sth Koreans, Hong Kongers, Indonesians) seeking a safe haven here which will drive up prices.
I expect property prices will be hit hard during the course of this year. A big reason property prices in Australia are high is foreign investment, notably from China. This is going to smash China's economy, which can surely only hurt property prices. And of course, the world's economy will be hit pretty hard by this. You don't shut down half of China and a good chunk of the rest of Asia without causing economic harm, even if the cause is nothing. Global tourism is going to be smashed this year, which reduces the demand for accommodation (when people are on holiday they occupy twice as much accommodation as usual). People aren't going to be as keen to go out to a movie or restaurant or sport event (Olympics will probably be cancelled, they're still reluctant to say it but c'mon, it's pretty obvious), plus all the other economic hits I could list. A lot of them are specific to housing. And if a percentage of the world does get knocked off by this virus, that's whatever number less people needing housing, and housing demand is relatively inelastic relative to population, while houses aren't going to be destroyed by the virus.
I'm not sure how bad it will get, but I think it'll make 2008 look like dropping a $20 into a drain, and housing will be significantly hit.
On the other hand, there could be a lot of Chinese and other Asians (Sth Koreans, Hong Kongers, Indonesians) seeking a safe haven here which will drive up prices.
@brty This was a great post! CheersA lot of people everywhere do not seem to understand what is going on with Coronavirus, as it is a true Black Swan that has hit a complacent world.
We could defeat it, and everything would go back to semi normal, with a recession the result of the damage already caused. That seems to be the thinking of most, the overpriced markets were due for a correction and we have had the needed catalyst to send them down into bargain territory.
Are we there yet?? I'm seeing the technical indicators way oversold, plus stocks that have reached support levels and in quite a few cases breached them.
This event is unlike the GFC, where some people in charge just decided to create a whole lot of money out of thin air to solve the problem. Also it is unlike Y2k, that was a non event, or the Asian currency crisis of the late 90's, etc, etc.
This time is different, because the problem cannot be solved by printing money, yet that is what many are expecting to happen.
What I'm feeling is that there is a possibility we are in the middle of an event like 1987, where markets crashed in a short period of time. There are also some uncanny resemblances market wise.
In 1986 the S&P500 low was ~229 points, with the '87 high being ~338 points, before the crash.
In very late 2018 the S&P500 low was ~2355 points, with the '20 high being 3393.
Back in '87 the markets were very overpriced, just like now, and after the initial sell off people bought the dip because all the indicators were way oversold. 1987 taught those of us involved in markets that anything can and will happen. Safety is always paramount in markets.
I've been 85% cash recently, been stopped out of BBOZ twice in the last 2 weeks (including last Thursday within 1c of the bottom), but went long BBUS which is well in the money. I've had these as a hedge against my long term stocks (small amount) that I still hold.
Just to lighten the mood, againsthegrain's comment ...
"I know 2 people one in Qld one in Vic" can I suggest you get out more, after the coronavirus.
I agree with most of your post, except a lot will depend on how well Australia and New Zealand cope with it, IF we go through with the appearance of being a relatively safe haven, house demand in Australia NZ will go through the roof.I expect property prices will be hit hard during the course of this year. A big reason property prices in Australia are high is foreign investment, notably from China. This is going to smash China's economy, which can surely only hurt property prices. And of course, the world's economy will be hit pretty hard by this. You don't shut down half of China and a good chunk of the rest of Asia without causing economic harm, even if the cause is nothing. Global tourism is going to be smashed this year, which reduces the demand for accommodation (when people are on holiday they occupy twice as much accommodation as usual). People aren't going to be as keen to go out to a movie or restaurant or sport event (Olympics will probably be cancelled, they're still reluctant to say it but c'mon, it's pretty obvious), plus all the other economic hits I could list. A lot of them are specific to housing. And if a percentage of the world does get knocked off by this virus, that's whatever number less people needing housing, and housing demand is relatively inelastic relative to population, while houses aren't going to be destroyed by the virus.
I'm not sure how bad it will get, but I think it'll make 2008 look like dropping a $20 into a drain, and housing will be significantly hit.
I agree with most of your post, except a lot will depend on how well Australia and New Zealand cope with it, IF we go through with the appearance of being a relatively safe haven, house demand in Australia NZ will go through the roof.
The wealthy Chinese will be wanting to get out of there ASAP and will probably only want to visit on webcam.
Having said that I doubt anyone will be lucky enough to miss the virus, one way or another.
Just my opinion.
Some US elite have taken up holdings in upper areas of the NZ South Island for some years now.I could imagine if that hypothetically happened, safe haven or "exclsuion living" buying as a reason, that Tassie could would get a bump in house prices. I couldn't think of a better place in Aussie! NZ I would be thinking Stewart Island or McKenzie country or Fjiordland would be my picks.
They have been buying up "doomsday day" bunkers for years now. Not just that because they bought so much property/investments they get a NZ passport to boot!Some US elite have taken up holdings in upper areas of the NZ South Island for some years now.
I read (can't source) 50% of analgesics are Made in ChinaOnly thing I spotted was paracetamol tablets - Panadol and etc.
Impossible to find masks at bunnings or hand sanitisers at woolies todayJust went to the local supermarket to buy a few things.
Took a wander around looking to see if anything looked to be running out bearing in mind this issue. Only thing I spotted was paracetamol tablets - Panadol and various other brands were still in stock but well back on the shelf as though rather a lot have been sold today. That makes some sense if there's a modest level of preparing going on.
Now that COVID's spread into Europe guess it's NOT a big deal now. It's just as harmless as the flu according to the BBC and Italian news and American news.
Something something trying to cause instability/panic with rising Asian "communist" threat. But the bull**** doesn't stick once it hits the fan and splatters everyone. LOL
On the other hand, there could be a lot of Chinese and other Asians (Sth Koreans, Hong Kongers, Indonesians) seeking a safe haven here which will drive up prices.
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