Economists say Britain’s unexpected exit from the European Union could boost the perception of Australian property as an investment safe-haven.
Uncertainty surrounds most aspects of the world economy following Brexit, and when it comes to the Australian property market some say it could spark a sharp drop in prices – an idea dismissed by REA Group chief economist Nerida Conisbee.
Ms Conisbee said she thinks if anything it will boost demand for Australian property.
“If you’re a pension fund in Europe, and you’re looking at London or you’re looking at Australia – whether Sydney or Melbourne – then all that turmoil makes Sydney or Melbourne look like a great investment,” she said.
Ms Conisbee said large and sudden falls in property prices required large macroeconomic events like unemployment surges or drops in growth, and neither of those were likely in the wake of Brexit.
“Overall, I’m pretty optimistic about Sydney, just given the supply issues, and Melbourne, to a limited extent,” she was quoted in the Financial Review, speaking at an Australian Israel Chamber of Commerce lunch.
LJ Hooker’s head of real estate Chris Mourd told the Financial Review the property market won’t see much change in the short term off the back of Brexit.
“The reality is there isn’t going to be an immediate impact to Australian property,” he said.
“What you’re probably going to see is the investor saying, we want to go somewhere we can project out over the next few years and with some level of stability.”
The turmoil on the sharemarket would also be likely to make property investment a more attractive and stable option.
“Most people would have woken up following the Brexit announcement and been very concerned about their superannuation,” Mr Mourd said.
“People will be seriously looking at bricks and mortar as a serious option. A lot of people will be doing the numbers on that.”