Coronavirus adds note of caution to housing outlook

The hike in prices has left the housing market vulnerable to the economic wildcard of coronavirus, says a new report.

It is still unclear to what extent the coronavirus outbreak will have on global economies and the property market more ­specifically. Picture: AAP

The increase in residential property prices has left the housing market vulnerable to the global economic wildcard of the coronavirus, a report from JLL says.

A reserved positivity was the theme of the real estate service firm’s residential outlook for 2020 as it flagged slowing growth in Sydney and Melbourne, followed by steady improvements across the rest of the country.

JLL senior economist Leigh Warner warned unpredictable global threats to the economy, namely the coronavirus and the US-China trade war, could dismantle the strong price gains over the past eight months. “Overall, it’s a fairly solid outlook of the market in the medium term, but we need to keep an eye on global trends,” Mr Warner said.

“We have lived with global uncertainty for sometime now. With asset prices across all classes quite high, it makes us quite vulnerable to some of these risks.”

It is still unclear to what extent the coronavirus outbreak will have on global economies and the property market more ­specifically.

Developers are now cancelling launches of new apartment blocks and investment seminars targeting offshore buyers as they confront a potential fall in sales due to the outbreak, while builders are facing potential delays because of supply chain shortages.

Chief forecaster for the Australian Construction Industry Forum and economist at global consultancy FTI Consulting, Kerry Barwise, said the impact of the virus on the domestic economy could move beyond the residential market.

“China will likely cut interest rates to stimulate the local economy and make it more attractive (to local investors),” Mr Barwise said. “So what will Australia do? Our economy will probably take a hit.”