Other than the obvious questions regarding health concerns and of course employment, one of the most common questions being asked right now is around the future of the property market.
In our opinion one of the best indicators of future performance is to look at historical data, and that is exactly what the Performance Property Advisory have done in this article.No financial crisis or economic downturn is identical, but they took a look at the four most recent crises, reviewed the share market movement and then looked at what the corresponding effect was on the national property market.
Here is what they found:
1982 Recession
In 1982 Australia experienced a short recession, the sharemarket fell -13.9%.
During that year the national property market rose +7.8%, and then went up the following years +5.8%, +12.9%, +10.55%.
1990 Recession
In 1990 Australia entered quite a severe recession, the share market fell -17.5%.
During that year the national property market rose +4.1%, and then in following years rose +1.5%, +4.8%.
During 2001 we had the September 11 terrorist attacks and the dot com crash. The following year the share market fell -8.1%.
During that year the national property market rose +13.9%, and then in following years went up +19.4%, +16.2%.
Global Financial Crisis
Most recently we had the GFC in 2008, that year the share market dropped a whopping -40%.
During that year the national property market rose +7.5%, and then in the following years went up +1.9%, +13.7%.
What can we learn from this?
So as you can see in every recent crisis, when the Australian share market fell, the national property market rose.
This crisis will pass, and the economy will recover. So while times might feel uncertain right now, this is a time to plan ahead, so when the recovery comes, and it will come, you are in the best position to capitalise
