FOMO (Fear of Missing Out) has been applied to both home purchases and toilet roll over the past weeks.
While, on the surface they may appear to have nothing in common, there’s actually quite a few common links – which bode well for lending in the property market.
Its about supply and demand and thankfully, our banks still have to capacity to supply finance for home purchasers while the underlying demand for property is going to remain strong.
Just as toilet paper manufacturers have increased output and retailers have created special sessions where the elderly can shop in peace, so to Australia can adapt to this storm.
- Financial regulators can extend short-term liquidity funding to banks and are considering easing regulations to help prevent a credit squeeze hitting cash-strapped small businesses.
- The federal government’s stimulus package will have an immediate impact on spending in the economy – with more to come
- Australia is one of the developed nations with a balance sheet that can best afford a stimulus package according to the OECD.
In 2008, the Global Financial Crisis saw unprecedented initiatives from governments and regulators across the globe to minimise panic. And we are seeing similar initiatives kick in this time.
Undoubtedly the virus will have an impact on the economy over the next weeks. This weekend’s Sydney clearance rate may well come in at 67 per cent. But the fundamentals remain strong – later this year, with interest rates at record lows, a growing population and a cash stimulus, property will keep going.