<a href="https://www.apartments.com.au/developers/sunland-group">Sunland Group</a> has officially lodged plans for its first Gold Coast apartment project since the departure of the Abedian family from the company three years ago, unveiling a new high-rise proposal for a prominent Broadbeach corner site on Old Burleigh Road.

The application was submitted by an entity directed by Tom Jamieson, stepson of longtime Sunland leader Soheil Abedian, and Riaz Rezvanipour, brother-in-law of Sahba Abedian, Soheil’s son.

Sunland acquired the 1,283 sqm site on the corner of Old Burleigh Road and Armrick Avenue for $9.5 million late last year and is now seeking approval for a <a href="https://www.apartments.com.au/new-apartments/99-101-old-burleigh-road-broadbeach-qld-4218">42-storey tower with 81 apartments</a>.

<img alt="First look: Sunland Group returns to Broadbeach with new Old Burleigh Road tower plans" data-entity-type="file" data-entity-uuid="fea2946d-90ee-4cfc-babe-2a8ad5db2cb6" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/pers.png?VersionId=BV0fihJw31nDIQ8ozY_h3GbS8mxDyhnm" />

Designed by <a href="https://www.apartments.com.au/architects/contreras-earl-architecture">Contreras Earl Architecture</a>, the proposed tower at 99-101 Old Burleigh Road would deliver a predominantly larger-format apartment mix aimed at the owner-occupier market. Plans include 17 two-bedroom apartments, 55 three-bedroom apartments, and nine four-bedroom residences across 35 residential levels.

The development also incorporates three basement levels, four podium parking levels, two levels of communal recreation facilities, and rooftop plant and equipment. A total of 189 car spaces are proposed, significantly exceeding the 90 spaces required under the planning scheme.

The architecture adopts a sculpted, curvilinear form, with deep wraparound balconies and integrated landscaping intended to soften the tower’s vertical expression. The planning report states the building’s “slender footprint/form provides a complimentary yet varied built form within the local streetscape” and contributes to “a varied, yet ordered skyline.”

Contreras Earl noted in its Architectural Statement that from the early stages, the project addressed a fundamental challenge: how to accommodate the required residential yield while avoiding the conventional model of a tower sitting on a rigid, fully resolved parking podium.

“The most direct response would have been to consolidate parking into a singular, flat podium and extrude a repetitive tower above,” the statement said. “While efficient, this approach would result in a consolidated built form with limited engagement with the surrounding landscape and public realm.”

Instead, the conventional podium model was “deliberately rejected”. The architects described the base of the building as “a landscaped architectural condition where structure, planting and circulation are integrated”.

“Rather than presenting a continuous built mass, the base of the building is articulated through a series of concrete planter elements that organise the podium into a fragmented system,” the statement said. “This approach reduces the perceived bulk of the lower levels while establishing a more permeable interface with the streetscape and adjacent open space.”

<img alt="Sunland" data-entity-type="file" data-entity-uuid="923fad8d-c960-4527-8fbe-975cf1ddf88d" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-25%20at%2010.32.03%E2%80%AFAM.png?VersionId=pngwb0hYOIUpq9vDw6F2EsOiVuHF3DiX" />

&nbsp;

The site sits within the High Density Residential Zone and inside the City of Gold Coast’s unrestricted “HX” building height area, where the planning framework anticipates intensified residential development tied to the expanding light rail corridor. The planning report notes the area is undergoing “transition toward more intense development forms” given its proximity to Broadbeach, Surfers Paradise, and high-frequency public transport infrastructure.

Positioned directly opposite Broadbeach Park and within walking distance of Florida Gardens light rail station, the development would sit among a rapidly evolving stretch of Old Burleigh Road that has become one of the Gold Coast’s most active apartment development corridors.

The application joins a growing pipeline of luxury residential projects reshaping Broadbeach, including nearby developments by 5Point Projects, Polycell, and Graya.

The planning report argues the project contributes toward the Gold Coast’s long-term housing targets under the South East Queensland Regional Plan, which forecasts the need for more than 100,000 additional high-rise dwellings across the city by 2046.

<section data-scroll-anchor="false" data-testid="conversation-turn-4" data-turn="assistant" data-turn-id="request-WEB:84a2af5e-d7cf-4ddf-922a-f4d44d6c6caa-1" data-turn-id-container="request-WEB:84a2af5e-d7cf-4ddf-922a-f4d44d6c6caa-1" dir="auto">
The Abedian family departed Sunland Group in late 2023, ending a four-decade association with the company, and subsequently established the private development firm Abedian &amp; Co. The group is currently delivering <a href="https://www.apartments.com.au/new-apartments/greenmount-residences-cnr-hill-street-and-marine-parade-coolangatta-qld-4225">Greenmount Residences</a> at Rainbow Bay and recently launched <a href="https://www.apartments.com.au/new-apartments/18-mary-avenue-14-18-mary-avenue-broadbeach-qld-4218">18 Mary Avenue</a> in Broadbeach.
</section>

Joel Robinson

First look: Sunland Group returns to Broadbeach new apartment market with new Old Burleigh Road tower plans

The Minns Labor Government has established the new Bays West Delivery Authority to lead the development&nbsp;of the Bays West Precinct and Blackwattle Bay Precinct.&nbsp;

The Authority is charged with creating Sydney’s newest precinct, a thriving, connected, sustainable hub with White Bay Power Station as its cultural heart. Its vision is to build on the area’s natural, cultural and industrial history to shape a vibrant new neighbourhood.

The precinct will deliver up to 8,500 well-located homes, including a minimum of 10 per cent affordable and essential worker homes. Combine new housing with public open space, opening public access to the waterfront for the first time in more than 100 years, while retaining important deep-water facilities to support Sydney’s working harbour.

Located just minutes from the Sydney CBD and connected to a world-class metro, ferry, walking and cycling links, the Bays West precinct will rebalance housing growth towards well-serviced inner-city locations and help tackle the state’s housing crisis.

The Bays West Delivery Authority,&nbsp;an agency of the Department of Planning, Housing and Infrastructure, will report to the NSW Minister for Lands and Property who already has oversight of major precinct renewal projects including at Blackwattle Bay and Barangaroo.

As part of the broader Bays West transformation, the Minns Government recently announced that a proposal from Lendlease to redevelop part of the Bays West Precinct has progressed to Stage 2 of the NSW Government’s unsolicited proposals process.

<img alt="Sydney" data-entity-type="file" data-entity-uuid="2ed71eb9-d8e8-4fa7-b9d1-de4531dcf2f3" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-25%20at%209.42.31%E2%80%AFAM.png?VersionId=IDryFIbped9SNDg72LEN_EecvhUsOPvp" />

The Minns Labor Government has also confirmed the Bays West precinct will have a new suburb name. This will be the first major suburb built in close proximity to Sydney’s CBD in decades and will encompass the area currently being referred to as Bays West, including Glebe Island and the White Bay Power Station. Served by a new Metro station just five minutes from the CBD, it will become one of the most populous suburbs in the Inner West and one of Sydney’s premier cultural destinations.

An early works program is taking shape, which&nbsp;includes the first stages of an international design competition.&nbsp;

The aim of the Bays West&nbsp;International&nbsp;Design Competition is to&nbsp;ensure design excellence is embedded in the project from the start. The competition will deliver an&nbsp;urban framework that defines the character, ambition and long-term identity of&nbsp;this&nbsp;former industrial precinct as it transitions to a vibrant, inclusive and sustainable residential&nbsp;neighbourhood.

The competition will be led by the Bays West Delivery Authority in partnership with Government Architect NSW.&nbsp;

It will launch with an invitation for a global Expressions of Interest, before moving to an invitation-only stage that will be assessed by a panel that&nbsp;will provide advice to Cabinet who will select a winner.

Premier of NSW, Chris Minns said the establishment of the new Authority is the first step in transforming the Bays West precinct into a vibrant, livable suburb minutes from the Sydney CBD and two stops from Hunter St Station on the Metro West line.

“The Authority will deliver well-located homes close to the heart of the city and integrate the new precinct with Blackwattle Bay and the new Sydney Fish Market.

“This is a generational opportunity to build a new suburb on the city’s edge and open the harbour foreshore to the public for the first time in a century.”&nbsp;

Minister for Lands and Property Steve Kamper said the new Bays West Delivery Authority established by the Minns Government will turbocharge the development of Sydney’s newest suburb.

“The Authority is working at a record pace to deliver an international design competition, planning pathways and a financial model so that this development benefits Sydney with well-designed homes in a central location, close to public transport, jobs, entertainment and essential services.

“If we want Sydney to stay liveable and affordable, we need to be bold about using underutilised government-owned land to deliver homes for the future while making sure essential working harbour functions can be accommodated.”

Bays West Delivery Authority established to "turbocharge" Sydney’s newest suburb

Around 400 additional homes could be built at Southwark Grounds on Port Road, lifting total site capacity from 1300 to around 1700 dwellings.

A recently approved code amendment would allow apartment towers of up to 14 storeys in some areas of Renewal SA’s redevelopment of the former West End Brewery.

Renewal SA Acting Chief Executive Shane Wingard said he welcomed the code amendment, with the increase in heights and homes making a positive impact on the supply of high-quality, well-connected housing close to the city.

“By going higher across some parts of Southwark Grounds, we are adding a substantial number of very well-located homes with little impact on project delivery time or planned open space,” Mr Wingard said.

Since the project officially launched in 2025, Mr Wingard said more than 12,000 enquiries had been received about living at Southwark Grounds.

“The very strong early interest we’ve seen since homes were first released in the precinct reinforces our plans to create more housing opportunities,” he said.

The Southwark Grounds code amendment was launched in December last year, with community engagement undertaken over five weeks from January.

It proposed increasing maximum building heights from eight to 14 storeys on the eastern section of Southwark Grounds, and to 12 storeys across the remainder of the site, with minimum building heights ranging from two to four storeys.

The code amendment was implemented through an Early Commencement policy in late January, allowing developers to quickly explore the viability of increased height and housing yield while other planning processes continue.

One of the first developers delivering apartment sites have already finalised redesigns to increase the number of apartments following the code amendment.

Samaras’ development adjacent to the future Colonel Light Park is now planning to deliver 125 apartments across 11 storeys, significantly greater than original plans of around 50 apartments across four storeys.

The developer is also exploring the potential for additional affordable housing outcomes.

Most of the apartments at Southwark Grounds will be delivered within a master-planned precinct on a large parcel of land on the eastern portion of the site, covering around two-thirds of its 8.4 hectares.

Wingard said detailed precinct planning over the coming months may identify further opportunities to increase yield further that could see total apartment numbers at Southwark Grounds, exceed this number.

Affordable homes at Southwark Grounds will also see a net increase, with Renewal SA maintaining its commitment to a minimum of 20 per cent affordable housing across the development.

&nbsp;

&nbsp;

Civil works have begun across the site, with construction under way on the first new roads surrounding a townhouse precinct in the south‑west corner of Southwark Grounds. This includes Renewal SA’s 17 Founder’s Row homes, which are on track for completion by Christmas.

“We expect to have people living at Southwark Grounds by the end of the year, so delivering roads and public spaces for those residents is among our highest priorities.”

Construction of 40 townhouses off Anderson Street, known as West Village and being delivered by Contour, is forecast to begin in mid‑2026. Kolabb’s Anderson Lane development will follow shortly after, delivering a further 26 townhouses.

Southwark Grounds is a state government‑led urban renewal project now set to deliver around 1,700 homes over the next decade.

Homes will be supported by a supermarket, a range of retail and hospitality offerings anchored by a revitalised Walkerville Brew Tower, a childcare centre, car parking and well‑connected public spaces.

400 new homes planned for Adelaide's former West End Brewery site

Brisbane developer&nbsp;<a href="https://www.apartments.com.au/developers/cavcorp">Cavcorp</a> has lodged plans for a new mixed-use residential development at <a href="https://www.apartments.com.au/new-apartments/55-wyandra-street-teneriffe-qld-4005">55 Wyandra Street</a>, Teneriffe, anchored by an 85-metre public laneway designed to reconnect the suburb’s riverfront with the Gasworks precinct.

The buildings, known as Teneriffe House and Teneriffe Lane, would replace the existing Queensland Cotton head office site with a 15-storey residential tower transitioning to eight storeys toward Helen Street. The project has been designed by Plazibat Architects and lodged as a code assessable development application for 93 apartments across a 3,401 sqm mixed-use site within the Newstead and Teneriffe Waterfront neighbourhood plan.

Central to the scheme is the transformation of an existing service easement into a publicly accessible cross-block connection linking Wyandra and Helen Streets. Cavcorp says the new laneway will act as both a pedestrian shortcut and a landscaped civic space between the Teneriffe Riverwalk, ferry terminal, and Gasworks precinct.

<img alt="First Look: Cavcorp unveils Teneriffe House and Teneriffe Lane plans for landmark wellness tower in Teneriffe" data-entity-type="file" data-entity-uuid="26e7f058-b065-4de8-b13d-a2b8cb64dfcc" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/bldg.png?VersionId=sELS0ZKYi361oYipUa1BIKfe_.DLZoFV" />

“The revised proposal delivers a legacy public-realm cross-block link, permanently secured for community use, transforming an existing private easement into a safe, high-quality pedestrian connection between the Teneriffe heritage riverwalk and the Gasworks–Long Island precinct,” the planning report states.

The laneway will sit beneath a large subtropical loggia integrated into the podium levels of the development. The design incorporates deep landscaping, water gardens, lobby spaces, business lounges, and ground-floor apartments to create what Cavcorp describes as a climate-responsive “urban verandah.”

The tower itself has been designed as a slender form with recessed floorplates and curved translucent corners inspired by contemporary Japanese architecture. The building height aligns with the Commercial Road precinct controls, which permit towers up to 15 storeys within proximity to Longland Street.

<img alt="First Look: Cavcorp unveils Teneriffe House and Teneriffe Lane plans for landmark wellness tower in Teneriffe" data-entity-type="file" data-entity-uuid="a8a17d40-43b6-4718-b3fd-67676fcbb485" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/pers%202_1.png?VersionId=i3VwDtp5AmL_8InW7w4qRbDFEpb744Jt" />

The project will comprise a mix of larger-format apartments aimed at owner-occupiers, downsizers, and families. The proposed apartment mix includes 11 loggia apartments across the lower levels, 50 four-bedroom Sky-Terrace apartments from levels three to seven, and 32 Sky-Pool Homes occupying the upper tower levels. The Sky-Pool Homes will feature private thermal plunge pools integrated into oversized balconies.

According to the application, the apartments are intended to reinterpret the scale and character of Teneriffe’s woolstore conversions and Queensland homes within a vertical residential format.

“The sky-pool homes build on Cavcorp’s previous projects and introduce a distinct apartment typology to Teneriffe, informed by both local and international precedent and responding to an identified market demand for enhanced safety, space and amenity,” the planning submission notes.

A major focus of the proposal is its five-level wellness and lifestyle offering, extending from the basement through to the rooftop.

Amenities proposed include a rooftop Swim &amp; Racquet Club with a 25-metre Olympic lap pool and tennis court, coworking spaces and libraries, golf simulators, wine storage, concierge facilities, business lounges, pet wash areas, and rooftop longevity-focused wellness spaces with spas, outdoor fitness zones, and landscaped terraces.

<img alt="First Look: Cavcorp unveils Teneriffe House and Teneriffe Lane plans for landmark wellness tower in Teneriffe" data-entity-type="file" data-entity-uuid="944b352c-49b9-4247-a4c6-5967b4b69fda" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/amenity.png?VersionId=Ed_qKjAtMwFT.5gfl3jiA9QwdWxSMsaX" />

All parking will be concealed within basement levels accessed from Wyandra and Helen Streets. Cavcorp says the deep-basement engineering approach allows the entire ground plane to prioritise landscaping, pedestrian movement, and active frontage rather than vehicle infrastructure.

The development continues Cavcorp’s concentration in Newstead and Teneriffe, where the Brisbane developer has delivered a number of apartment projects including Lucent, Le Bain, and Luminare, as well as the Long Island Wellness Precinct nearby. Several of those projects have received national design and architecture awards, including recognition under Brisbane’s “Buildings that Breathe” program.

Cavcorp unveils wellness-focused Teneriffe House and Teneriffe Lane apartment buildings

Focus Group Investments has lodged plans for a new apartment development at <a href="https://www.apartments.com.au/new-apartments/64-70-hanover-street-fitzroy-vic-3065">64–70 Hanover Street</a> in Fitzroy, seeking to utilise the Victorian Government’s recently introduced Great Design Fast Track pathway to accelerate approvals for the project.

The proposal is among the latest developments to emerge through the state-led initiative, which was established to fast-track well-designed residential projects in activity centres and transport-connected inner-city locations. The pathway allows qualifying developments that meet elevated design and housing benchmarks to bypass traditional council planning timeframes and instead be assessed directly by the Department of Transport and Planning.

Designed by SJB, the development will comprise a mix of apartments above activated lower levels, with a strong focus on architectural articulation, landscaping, and communal amenity. The design response seeks to balance the industrial character of Richmond’s former warehouse precincts with a more contemporary residential form.

<img alt="First look: Focus Group Investments taps Victoria’s Great Design Fast Track for Richmond apartments" data-entity-type="file" data-entity-uuid="abea51cc-d85b-479e-9aef-a589f3b37ca7" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/ground.png?VersionId=e1Kf8EyPWwyiVumtqQ4rM5S4GpOR3CCz" />

Proposed are 63 new dwellings, a wide ranging mix of studio, one-, two-, and three-bedroom apartments, and townhouses and duplexes. They will be spread across a part-three, part-eight storey building.

The Planning and Urban Context Report by Tract says the development is of an "exemplary architectural standard" and has been carefully crafted by SJB Architects.

"Dwellings&nbsp;will benefit from excellent access to natural light, cross-ventilation opportunities and extensive communal space," the report noted.

The architectural material highlights the project’s integration of landscaped elements and communal spaces throughout the building. The proposal also incorporates sustainability initiatives aligned with the Victorian Government’s push for higher-performing apartment developments under the fast-track program.

The Great Design Fast Track was unveiled by the Victorian Government in 2024 as part of a broader housing supply strategy aimed at accelerating the delivery of new homes. Projects assessed through the pathway must demonstrate high-quality architecture, sustainability outcomes, and housing diversity while being located close to public transport and existing infrastructure.

<img alt="First look: Focus Group Investments taps Victoria’s Great Design Fast Track for Richmond apartments" data-entity-type="file" data-entity-uuid="afdbe834-8dc4-4a77-a943-ba07bc927348" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/site_11.png?VersionId=0J657j.TaChAZfp93wqJYBTqSsnREJx2" />

Focus Group, founder and led by Paul De Lutiis, is increasingly active across Melbourne’s inner suburbs, targeting well-connected urban renewal locations suited to medium and higher-density residential development. The Fitzroy proposal continues that strategy, leveraging the area’s strong transport links, established retail amenity, and proximity to the CBD.

Fitzroy has been one of the most popular spots for developers and buyers in recent years. The likes of PACE Development Group, SMA Projects, Crema Group and Chapter Group, currently selling projects in the suburb.

First look: Focus Group Investments taps Victoria’s Great Design Fast Track for Fitzroy apartments

COVID-19

<html><body>
GUEST OBSERVATION
You’ve lost income because of the coronavirus crisis and finding it hard to pay the bills. What if you can’t pay your rent? 
The short answer, if you live in Australia, is that rules changes give you more time – at least six months – before you face eviction.
But that’s all. Nothing else has changed. As <a href="https://www.theguardian.com/australia-news/live/2020/apr/03/coronavirus-update-live-news-australia-queensland-victoria-nsw-qld-tas-act-sa-wa-nt-covid19-latest-updates?page=with:block-5e86b5d58f0866297e9f624a" target="_blank" style="font-family: Tahoma, Helvetica, Arial, sans-serif;">Prime Minister Scott Morrison has said</a>, the moratorium on evictions “doesn’t mean there’s a moratorium on rents”.
Whatever rent you don’t pay you will still owe, with consequences eventually.
There’s unlikely to be any other national assistance for residential tenants along the lines the commercial tenancy market <a href="https://www.pm.gov.au/media/update-coronavirus-measures-030420" target="_blank">might get</a>.
But there may be other assistance on offer according to your state and territory. In Queensland, for example, you may be eligible for a one-off rental payment.
So this is how your options stand.
Eviction moratorium
The National Cabinet – incorporating the federal cabinet and state and territory leaders – announced the eviction moratorium <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2020-04-03/eight-million-tenants-wait-to-learn-coronavirus-rent-bill/12114082" target="_blank">on March 29</a>. Rental law is a state and territory matter, so legal enforcement depends on these governments enacting legislation.
Tasmania was the first <a href="https://www.cbos.tas.gov.au/topics/housing/residential-tenancies-covid-19-emergency-provisions" target="_blank">to do so</a>, pre-empting the National Cabinet decision with a four-month ban on evictions. It’s likely a good indication of what other states and territories will do.
The Tasmanian legislation prohibits commercial and residential landlords from serving notice to vacate for rent arrears for the duration of the “emergency period”, unless:
<ul>
<li>
the lease is non-fixed term and property is being sold (with notice being served before April 3)
</li>
<li>
the Residential Tenancy Commissioner orders termination because of “severe hardship” to either party.
</li>
</ul>
Severe hardship is an established part of tenancy law. It allows parties to apply for a fixed-term lease to be terminated without penalty. It is possible a landlord could argue financial hardship based on needing rent to cover their own debts, but commissioners (or tribunals in other jurisdictions) are likely to scrutinise such applications closely.
(Severe hardship is discussed further below, under “What if I want to break the lease?”).
What if I don’t pay my rent?
If you don’t pay your rent, your debt will keep accruing. Once the moratorium ends, you face eviction.
Your landlord will have the right to keep your bond to cover the rent. If you owe more, they can chase it up through debt collectors or file court proceedings. If this happens, your personal <a href="https://www.canstar.com.au/credit-score/what-is-a-credit-rating/" target="_blank">credit rating</a> could take a hit, and costs may be added to any judgment against you.
So take the Prime Minister’s <a href="https://www.afr.com/property/commercial/office-tenants-inundate-landlords-with-rent-relief-requests-20200330-p54fe6" target="_blank">advice</a>: negotiate with your landlord or agent.
Try to work out an arrangement both sides can live with. Remember, many private landlords rely on rent to pay the mortgage. Even with the <a href="https://www.ausbanking.org.au/covid-19-relief-faqs/" target="_blank">major banks offering mortgage relief</a> during coronavirus crisis, the interest on that debt will keep accruing.
Can I get any rent assistance?
There are generally no special provisions for rent assistance during the coronavirus crisis.
So far only <a href="https://www.qld.gov.au/housing/renting/rent-assistance/bond-loan/covid19-rental-grant" target="_blank">Queensland</a> is offering any form of special rental assistance – a one-off payment of up to $2,000, paid directly to your lessor. To be eligible, you must have lost your job due to the pandemic and have applied to Centrelink for income support.
In other states the usual rules for <a href="https://www.servicesaustralia.gov.au/individuals/services/centrelink/rent-assistance" target="_blank">rent assistance</a> apply. You need to first qualify for Centrelink income support, such as the JobSeeker payment, Youth Allowance or the Parenting Payment. Centrelink provides up to A$139 a fortnight if you’re single, and A$164 for a couple with two children.
What about a rent reduction?
As mentioned, there’s no sign there’ll be direct subsidies for residential tenants, though there may be a national package to reduce commercial rents.
The closest thing so far announced is the <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2020-04-02/act-government-covid19-coronavirus-spending-package-announced/12114504" target="_blank">Australian Capital Territory’s</a> encouragement to residential landlords to lower rents by at least 25% through direct tax relief equal to half the discount (up about $100 a week). The scheme is voluntary, so it remains to be seen how effective it will be.
What if I want to break the lease?
If you’re not on a fixed-term lease, but a monthly or weekly tenancy, you simply have to give the required notice to the landlord (usually 21 days).
If you’re on fixed-term lease, state and territory laws allow both tenants and owners to apply to break the lease without penalty if its continuation causes “severe hardship”.
But this option “should be seen as a last resort,” <a href="https://www.cbos.tas.gov.au/topics/housing/residential-tenancies-covid-19-emergency-provisions" target="_blank">advises</a> the Tasmanian government. “It is best to maintain a positive relationship between owners and tenants. The best way to do this is for owners and tenants to discuss their concerns.”
It is possible your lease may contain a force majeure clause providing for suspension or termination when unforeseeable events (for which neither party is responsible) occur. Unfortunately, such clauses are extremely rare in leases, and unlikely to cover pandemics.
Is there anything else to consider?
If you consistently miss rent payments you risk going on a “black list” – a privately owned tenancy database that real estate agents use to screen tenants. A track record of missing payments can mean a black mark on a future rental application.
So the bottom line: talk with your landlord.<img src="https://counter.theconversation.com/content/135312/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
<a href="https://theconversation.com/profiles/mark-giancaspro-182268" target="_blank">Mark Giancaspro</a>, Lecturer in Law, <a href="https://theconversation.com/institutions/university-of-adelaide-1119" target="_blank">University of Adelaide</a> and <a href="https://theconversation.com/profiles/david-brown-103001" target="_blank">David Brown</a>, Co-Director, Bankruptcy and Insolvency Scholarship Unit, <a href="https://theconversation.com/institutions/university-of-adelaide-1119" target="_blank">University of Adelaide</a>
This article is republished from <a href="https://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/what-if-i-cant-pay-my-rent-these-are-the-options-for-rent-relief-in-australia-135312" target="_blank">original article</a>.
Correction: this article has been amended to clarify that consistent non-payment of rent is required to be listed on a residential tenancy database. The article originally suggested any non-payment was a risk. For more advice contact the tenants advice service in your state or territory.
</body></html>

j.ballantyne1990-6AQqhLzZaK

What to do if you can't pay rent (nothing is not a good option)

<html><body>
Working from home is not a foreign concept to the professional industry, with studies revealing that <a href="http://blog.au.indeed.com/2019/01/29/report-68-australian-employers-allow-remote-working-attitudes-divided/">two-thirds of Australian employers</a> allowed their employees to work remotely last year. But what was once considered a luxury or an indicator of the modern professional has since become the key to survival for organisations and industries across the world.

The ability to shift to a remote workplace is a privilege in itself and one that was not always feasible sans the technology age. Nowadays, we have access to modern technology and software that allows employees to remotely access their work system from anywhere in the world and with the addition of work equipment such as laptops and screen monitors, a home office is formed. But like a traditional workplace, it takes more than just equipment and programs to run a productive and cohesive business.

As an increasing number of organisations in Australia encourage their employees to work remotely, to urgently and effectively reduce the spread of COVID-19, employers and managers are posed with a new breed of management challenges to navigate.

<h2>Open communication is paramount </h2>

Working remotely has the potential to inspire productivity in employees but on the flip side, the lack of structure can just as easily hinder motivation.

Expectations of each employee, regardless of position, needs to be established and clearly communicated at the early stages of the relocation and must remain consistent throughout the process.

It doesn’t matter if an organisation has five or 50 employees, an open-door style policy of communication between senior management and employees is the most effective way to maintain team cohesion as it will reduce the likelihood of miscommunication and will allow trust to build between the manager and employees.

Consistent and open dialogue is also key to encouraging employees to display a high level of commitment, something that is highly valued at a time like this, as opposed to just the communal obligation that is associated with a traditional workplace.

<h2>Encourage a set workday structure </h2>

Encouraging employees to structure their day around their traditional routine is an effective way to maintain normalcy in a new work environment.

All employees should schedule in set breaks, just as they would have in their regular office hours and make the effort to get out of the house at least once a day. Whether it is a coffee break or an after-lunch walk, these scheduled breaks create important boundaries between personal and professional lives.

As most individuals bunker down to <a href="https://snacknation.com/blog/social-distancing-at-work/">practice social distancing</a>, lunchtime catch-ups and office banter can seem like a long distant memory. To mitigate feelings associated with isolation it is important that managers encourage socialisation between staff as if they were working in the same space. Employees should be encouraged to take advantage of communication software, whether it be Facetime, Slack or Zoom, to engage with each other as if they were communicating across their desks. These platforms are also great for bouncing ideas around or to check in on how someone is going.

<h2>Increased focus on mental health </h2>

Positive social and mental health needs to be a priority in any workplace but given the peculiar new reality we are all facing, it has never been more important to manage.

Managers and organisations need to foster positive relationships between employees by providing a platform to discuss non-work related topics. This could include company-wide lunches via video conference or phone calls between employees during their lunch break.

Although working remotely creates a physical separation between the HR team and employees, the relationship shouldn’t suffer as a result. This means scheduling regular meetings where the team can check in with every single staff member personally to see how they are dealing with remote working life. A consistent schedule allows employees to discuss any issues related to remote work, such as feeling lonely or isolated or struggling with their workload or new work environment in any way.

With no foreseeable end in sight for COVID-19, remote work arrangements and virtual workplaces are rapidly becoming the new norm across the globe. It is with ongoing communication and mutual understanding that employers and employees can maintain momentum for their organisations. Looking past the negative undertones, virtual workplaces offer the opportunity for us all to develop our businesses and employee relations, to offer vital support to each other to meet the demands at hand and ahead.
</body></html>

How to effectively manage a remote workplace during ‘social distancing’

<html><body>
These days, it’s all about <a href="https://www.youtube.com/watch?v=bYQjssb7xdk">social distancing</a>. Studies have shown that the novel coronavirus (COVID-19) has an incubation period of five days — a significantly longer period of time compared to the common cold, which is generally one to two days — and patients can infect others before beginning to show symptoms. Before a cure is found, social distancing is the way to go about limiting the spread of the virus. 

In a <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2020-03-20/coronavirus-covid-19-scott-morrison-enhanced-social-distancing/12075532">press conference</a> last week, Prime Minister Scott Morrison advised Australians to maintain at least 1 to 1.5 metres of physical distance between one another in public spaces. However, social distancing is just as critical at home as it is outdoors, especially if anyone at home had been in contact with a possible carrier. The Australian Department of Health has released <a href="https://www.health.gov.au/sites/default/files/documents/2020/03/coronavirus-covid-19-information-on-social-distancing.pdf">guidelines</a> to do so.

Social distancing should be and can be, pre-emptive and low cost, according to the <a href="https://www.mja.com.au/journal/2020/212/10/pre-emptive-low-cost-social-distancing-and-enhanced-hygiene-implemented-local">Medical Journal of Australia</a>. In other words, social distancing should be practised as early as possible as a preventive measure, and it can be achieved without spending money on sophisticated medical equipment.

<h2>The following applies to all households:</h2>

Maintaining hygiene around the household is essential, especially in ‘high touch’ areas such as the bathroom and the kitchen. Health officials discourage against touching one’s face, so perhaps intimate contact between family members should be avoided for the time being. Health officials are also encouraging people to take extra precautions when coughing or sneezing. Fluids can easily pass on from one person to another through hands; considering the high infection rate of COVID-19, this etiquette should not be taken lightly. The correct and socially responsible way is to cough or sneeze is into the <a href="https://www.sbs.com.au/topics/science/humans/article/2016/02/15/why-you-should-sneeze-your-elbow">crook of your elbow</a> and always remember to wash that item of clothing as soon as you can. 

<h2>For households with members under quarantine, or members who are ill: </h2>

In addition to the above steps, extra steps have to be taken to contain the spread of the virus under one’s roof. If a family member at home is ill, they should ideally stay in an isolated room, and reduce all physical contact with other members of the household.

If possible, there should only be one person caring for the sick individual, and the carer should be wearing a surgical mask at all times. When bringing food to the patient, it is encouraged to leave it by the door or a place where the patient can collect it without being in contact with the carer. The door of the patient’s room should also be kept closed at all times to reduce the risk of the virus travelling to other parts of the home.

If anyone at home is exhibiting symptoms of COVID-19, <a href="https://www.health.gov.au/news/health-alerts/novel-coronavirus-2019-ncov-health-alert/what-you-need-to-know-about-coronavirus-covid-19#how-to-seek-medical-attention">follow instructions from the Department of Health</a> and seek medical attention immediately. For serious symptoms, such as difficulty breathing, the urgent medical helpline is 000.

The Australian Government has also set up a National Coronavirus Helpline for those who wish to seek information about the virus. The number, 1800 020 080, is available 24 hours a day, seven days a week. 
</body></html>

COVID-19: Is it possible to practise social distancing at home? Absolutely

<html><body>
COVID-19 has gone from a distant news story to <a href="/expert-insights/buying/changes-the-real-estate-industry-will-experience-as-a-result-of-the-coronavirus">now impacting every one</a> of us at a speed that has taken the nation – and the world – by surprise.

<a href="/guides/covid-19-how-to-adapt-to-working-from-home">Adaptation is now paramount</a> for every operator, in every industry, and real estate is no different. Service providers need to find ways to adjust, and fast, because people still need to buy and sell property – perhaps even more so once the real economic impact starts to play out.

Let’s look at some of the potential effects of Coronavirus on the Australian property market.

<h2>March/April 2020 – immediate effects &amp; emerging trends</h2>

The Australian property market <a href="https://reia.asn.au/backing-the-governments-advice-on-auctions-and-open-houses/">changed overnight on March 25</a>, with both in-room and onsite auctions, and open homes, being <a href="https://www.pm.gov.au/media/update-coronavirus-measures-24-March-2020">banned by the Prime Minister</a> and industry bodies bracing themselves for (and lobbying against) further restrictions.

Buying a home or an investment property is a significant decision often fraught with potential stresses at the best of times. So not surprisingly, we already see a softening in the market and both investors and homeowners putting searches on hold.

Having said that, there are existing ‘cashed-up’ buyers out there who need to buy now, having already sold their existing house. Investors will also certainly look to make the most of the current situation and buy discounted stock. Prices are, as you’d expect under such circumstances, coming off. With lower levels of buyers in the market, competition is not as strong, which means that results have not been as high as they were even a couple of weeks ago.

In the medium term, as employment fluctuates and, devastatingly, people lose their jobs, many Australians are going to be highly motivated to sell their property. This will cause further softening of prices in the property market and, because of social distancing rules and the measures people are taking to prevent possible infection, it is becoming increasingly difficult – and unappealing – to do even private inspections.  

This will likely be the case for the next couple of months as the Coronavirus pandemic peaks – and is hopefully resolved – in Australia.

<h2>The longer-term projection?</h2>

Once we’ve managed to get through this immediate crisis and the worst of the pandemic’s impact has dissipated, we’d expect is for <a href="/news/covid-19-understanding-what-you-can-and-cant-control-the-importance-of-cross-referencing-facts">people’s collective fears</a> to diminish fairly quickly, resulting in a jump in pricing.  Buyers currently holding off their searches will return, increasing competition. But ultimately, it’s a grey area for both the Australian and the global economy, so the long-term economic impact of Coronavirus simply isn’t known.

<h2>Buyers, don’t be afraid to seek help</h2>

Buyers’ agents – agents acting solely on behalf of buyers during a property transaction – are inherently well equipped to help buyers navigate some of the immense challenges the COVID-19 pandemic presents.

<a href="/guides">Video walkthrough</a> provides a full virtual property tour that can be viewed from anywhere in the world. These tours were originally created to service the needs of people who didn’t have physical access to view properties, such as overseas investors, however now this content can be made use of by everyone.

Bidding services are another option, enabling buyers to avoid auction rooms. 

<h2>Advice from the experts</h2>

If you’re looking for your new home or a long-term purchase, negotiate now. You’ll find you’ll be in a marketplace that’s going to be <a href="https://www.theguardian.com/australia-news/2020/mar/20/australian-housing-market-will-hit-the-wall-in-coronavirus-recession-experts-say">down between 10-20%</a> from its standard peak pricing, and you’re already getting a discount. If you’ve found what you feel is the right home for your wants and needs, don’t be too cautious about purchasing – if you have secure financials and have done thorough due diligence research.

A bargain-hunter will want to buy the cheapest possible property at the best price, so watch and wait over the coming weeks.

Make sure your finance has been approved. If you’re ready to act swiftly and <a href="/developments">secure the property that’s right for you</a>, at the right price. 

Nobody knows what the market is going to be doing in <a href="/news/covid-19-how-the-world-previously-recovered-from-sars-and-whether-or-not-we-can-do-the-same-this-time-round">6, or even 3 months</a>. If you are in the market to buy property, do as much research as you can, and find out what your trusted experts – who live and breathe the market daily – are forecasting and would recommend for you as they may just point you to a great opportunity.  
</body></html>

How to navigate buying property during the COVID-19 crisis 

<html><body>
In their emergency meeting in March where they cut the official interest rate to a record low 0.25 per cent, the RBA members noted that there was evidence lower interest rates were benefitting the community as a whole.
RBA governor Philip Lowe said the members noted the decline of 1.25 per cent over the preceding year as a substantial easing of monetary policy.
However he added that to date the lower rates had been "boosting the cash flow of businesses and the household sector as a whole, and also helping trade-exposed industries through the exchange rate channel."
Lowe said that members acknowledged that very low interest rates have uneven effects and negative consequences for some people – especially those relying on interest income – but the evidence was that lower interest rates were benefiting the community as a whole.
"Members supported the proposal and agreed that the cash rate would not be increased from its lower level until progress is made towards full emplyment and there is confidence that inflation will be substantially within the two to three per cent target range", Lowe noted.
The RBA have had a steadfast unemployment rate target of 4.5 per cent. The latest data has it pegged at 5.1 per cent, however that was calculated before the recent COVID-19 job losses.
Some economists are tipping the unemployment rate to reach over 11 per cent, so don't expect a rate hike anytime soon.
Lowe said it was "considered likely that the cash rate would remain at a very low level for an extended period", while he further ruled out any change of rates going in to negative.
To read the full RBA minutes, click here.
</body></html>

wdavis-8cCN98p7xp

Evidence lower interest rates are benefiting the community: RBA's March emergency meeting minutes

<html><body>
MARCH EMERGENCY RBA MINUTES
<h2 id="recent-developments">Recent Developments</h2>
In a special meeting convened to consider options for monetary policy responses to the economic effects of the novel coronavirus disease (COVID-19), members commenced their discussion with a review of recent developments. The outbreak was noted as first and foremost a public health issue. Many countries were shutting their borders and placing restrictions on businesses and individuals to slow the spread of COVID-19. This was causing very significant disruption to economies around the world.
Financial markets had been very volatile and there had been sharp falls in the prices of risky assets as market participants struggled to price the risks, given their unprecedented nature. Equity prices in the advanced economies, including in Australia, had fallen by around 30 per cent. The falls had been broadly based across sectors, although equity prices in the energy and tourism sectors had fallen particularly sharply. The equity prices of banks had also fallen significantly, although it was recognised that the capital and liquidity positions of banks had been strengthened over the prior decade.
Liquidity in credit and money markets was very poor and the market for corporate bond issuance was essentially closed to all but the very highest quality borrowers. Credit spreads in corporate bond markets had widened substantially, particularly for high-yield bonds, increasing funding costs for corporations. Members noted that any further widening in spreads would translate directly into higher borrowing costs, since government bond yields had very little further room to fall. Yields in money markets had also risen, although banks and highly rated non-financial corporations were still able to access these markets. The Australian banks had strong funding positions and did not need to source additional funding from bond markets in the near term.
Government bond markets had displayed signs of dysfunction, with many participants seeking to liquidate their portfolios. This had also affected traditionally safe and liquid markets, such as the US Treasury market. The increase in yields and volatility partly reflected the unwinding of highly leveraged positions, and the constrained ability of dealers to absorb additional bonds after having reached leverage and capital constraints. The dysfunction in the US Treasury market had spread widely, given its important role as a pricing benchmark for the global financial system.
In foreign exchange markets, large repatriation flows had supported the yen, and the US dollar had appreciated against most other currencies. Members observed that the Australian dollar had depreciated against the US dollar by around 10 per cent over the preceding month, to be at its lowest level since 2002. Among other advanced economies, the exchange rates of commodity exporters such as Norway, Canada and New Zealand had also depreciated notably. Capital flight had been evident across emerging markets, with exchange rates depreciating against the US dollar and sovereign bond yields moving sharply higher.
In response to these developments, a number of major central banks had made sizable interest rate reductions at unscheduled meetings. The Federal Reserve had cut its policy rate by 100 basis points after an earlier cut of 50 basis points. The Federal Reserve, the Bank of England and the Reserve Bank of New Zealand had each lowered policy rates to ¼ per cent, and interest rates were lower than this in Japan and Europe.
Central banks had expanded their standard open market operations to provide short-term liquidity to financial institutions, including by lengthening the terms on which liquidity is extended. To support Australian financial markets, the Bank had injected liquidity through its open market operations, increasing Exchange Settlement (ES) balances from around $2.5 billion to $14 billion. The Bank had also announced that it would be conducting daily operations at one- and three-month terms and regular repurchase operations on terms of six months or longer. In a number of jurisdictions, including in Australia, central banks had stated that they would purchase government bonds in secondary markets to support their smooth functioning.
Members noted that many central banks were introducing additional measures to support market functioning and promote the resumption of activity in corporate credit markets. The Federal Reserve had introduced a commercial paper funding facility to provide a backstop for the market. The Bank of England, acting as agent for the UK Treasury, had announced that it would purchase unlimited amounts of commercial paper issued by non-financial firms with an investment grade credit rating. The Bank of England and the European Central Bank had expanded funding schemes to encourage banks to lend to businesses. There had also been an easing of bank regulatory requirements in many countries.
The Federal Reserve, in conjunction with a number of other central banks, had also lowered the cost and extended the terms of foreign currency borrowing through foreign exchange swap lines. This was designed to alleviate the very high demand for US dollars from non-US entities that had issued debt in US dollars that needed to be refinanced.
Members discussed how these developments and the rapidly changing situation were affecting the outlook for economic activity. The immediate outlook for the Australian and global economies was highly uncertain, but members viewed it as very likely that most countries would experience a very sharp contraction in economic activity. Members considered the information available for the Chinese economy, which indicated that there had been a large contraction in economic activity in the March quarter. Some indicators, such as coal usage, suggested that economic activity in China was beginning to pick up, although it was too early to assess the extent to which activity would recover in the June quarter.
While it was not possible to provide an updated set of forecasts for the economy given the fluidity of the situation, it was likely that Australia would experience a very material contraction in economic activity, which would spread across the March and June quarters and potentially longer. The size of the fall in economic activity would depend on the extent of the social distancing requirements, and potential lockdowns, put in place to contain the virus. The composition of consumption was changing considerably, with spending at supermarkets and pharmacies increasing substantially, while spending on hospitality and other services was falling sharply. Many service industries were being severely disrupted, with significant spillovers across the economy. There were likely to be significant job losses over the months ahead, although the extent of this would depend on the capacity of businesses to retain employees during this period. At the same time, some industries were employing more workers, particularly those involved in the retail supply chain and delivering goods. In time, following containment of COVID-19, the economy is expected to recover, but the timing of this was uncertain.
<h2 id="considerations-for-monetary-policy">Considerations for Monetary Policy</h2>
Following their review of recent developments in financial markets and the implications for economic activity, members turned to how monetary policy could most effectively support the Australian economy through the challenging period that lay ahead.
Members acknowledged that the primary response to the COVID-19 outbreak was to manage people's health, but that other arms of policy, including monetary and fiscal policy, would play an important role in reducing the economic and financial disruption. Members noted the measures that the Bank had taken to support the Australian economy and operation of financial markets over the days preceding the meeting.
The Governor proposed a package of policy measures, which together would assist in supporting the Australian economy through the period ahead. The focus of the package was on ensuring that funding costs were low across the entire economy and that credit remained available to businesses and households. This would help build the necessary bridge to the economic recovery and support that recovery once the COVID-19 outbreak is contained.
The elements of the package were discussed in turn.
1. A further reduction in the cash rate target to 0.25 per cent.
The proposed cut in the cash rate to 0.25 per cent would bring the cumulative decline over the preceding year to 1¼ percentage points. Members noted that this would be a substantial easing of monetary policy, which, to date, had been boosting the cash flow of businesses and the household sector as a whole and also helping trade-exposed industries through the exchange rate channel. Members acknowledged that very low interest rates have uneven effects and negative consequences for some people – especially those relying on interest income – but the evidence was that lower interest rates were benefiting the community as a whole.
Members supported the proposal and agreed that the cash rate would not be increased from its lower level until progress is made towards full employment and there is confidence that inflation will be sustainably within the 2–3 per target cent range. Given this, it was considered likely that the cash rate would remain at a very low level for an extended period. Members also agreed that the cash rate was now at its effective lower bound. Members had no appetite for negative interest rates in Australia.
2. A target for the yield on 3-year Australian Government bonds of around 0.25 per cent.
Members considered a proposal to extend and complement the longstanding approach to target the cash rate, which forms the anchor point for the risk-free term structure, by also targeting a risk-free interest rate further out along the yield curve. The specific proposal was to target the rate at the three-year mark, given its importance as a benchmark rate in financial markets and its role in funding across much of the Australian economy. Such a target would also be consistent with the expectation that the cash rate would remain at a very low level for several years.
Members supported the intent of the proposal and agreed that it would make most sense, including from a communication perspective, to set the target at the same rate as the target for the cash rate, namely 25 basis points. They acknowledged that the target did not need to be achieved precisely every day. Members noted that some time might be needed before yields would fall to the target from their level over the weeks preceding the meeting – of around 45 basis points. Members discussed the importance of the Bank's communication focusing on how this target would both support the economy in the immediate period and assist with a strong recovery once the COVID-19 outbreak has been contained.
Members noted that the yield target would be achieved by regular auctions in the secondary bond market, whereby the Bank would implement a program to purchase bonds of different maturities, given the high level of substitutability between bonds. The Bank would also be prepared to buy semi-government securities to achieve the target and help facilitate the smooth functioning of the bond market, and would work closely with the Australian Office of Financial Management (AOFM) and state government borrowing authorities. Members noted that, although the program of bond purchases would entail an increase in the size of the Bank's balance sheet, the focus of the program would be on bond yields rather than the quantity and timing of bond purchases. The objective of this component of the proposed policy measures would be to add to the downward pressure on funding costs for financial institutions, households and businesses.
Members thought it likely that the target for three-year yields would be maintained until progress was made towards the Bank's goals of full employment and the inflation target. Furthermore, they expressed the view that it would be appropriate to remove the yield target before the cash rate itself was raised.
3. A term funding facility for the banking system, with particular support for credit to small and medium-sized businesses.
The proposed scheme had two broad objectives. The first was to lower funding costs for the entire banking system to ensure a low cost of credit to households and businesses. This objective would complement the target for the three-year bond yield. The second objective was to provide an incentive for lenders to support credit to businesses, especially small and medium-sized businesses. Members agreed that this aspect would be vital as many small businesses would be likely to find retaining staff in the period ahead extremely challenging.
Under the proposed facility, the Bank would provide a three-year funding facility to authorised deposit-taking institutions (ADIs) at a fixed rate of 0.25 per cent, which was substantially below lenders' current funding costs. ADIs would be able to obtain initial funding of up to 3 per cent of their existing outstanding credit until the end of September 2020, and would have access to additional funding if they increased lending to businesses, especially to small and medium-sized businesses, with these funds able to be drawn upon until the end of March 2021. This size of the proposed facility was at least $90 billion. Members endorsed the proposal that no additional allowance be available to finance growth in lending for housing.
Members expressed support for the proposed scheme and discussed some technical aspects. They noted that institutions accessing the scheme would need to provide eligible collateral to the Bank, with haircuts applying to provide appropriate risk mitigation. The interest rate that would apply would be fixed for the term of the funding, which was consistent with the Bank's expectation that the cash rate was likely to stay at a very low level for some time. Members also agreed that including a penalty rate to counteract the risk of a reduction in lending could act as a disincentive for institutions to participate in the scheme. The Governor indicated that the first drawings under the facility would be possible no later than four weeks from the date of the meeting.
The Governor informed members that he understood that the Australian Prudential Regulation Authority (APRA) would support ADIs using the scheme. In addition, the Australian Government was in the process of developing a complementary program of support for the non-bank financial sector, small lenders and the securitisation market, which would be implemented by the AOFM. Members observed that such support would be important to assist non-bank financial institutions and small lenders to continue to provide credit to households and businesses.
4. Exchange settlement (ES) balances at the Reserve Bank to be remunerated at 10 basis points, rather than zero as would have been the case under the previous arrangements.
The Governor outlined the implications of the proposed policy measures for the cash market. The existing ‘corridor system’ means that the balances financial institutions hold with the Reserve Bank overnight earn an interest rate 25 basis points below the cash rate, and in the event that a financial institution needed to borrow from the Reserve Bank overnight, it would be charged 25 basis points above the cash rate. Should the cash rate be reduced to 25 basis points, the interest rate on ES balances would be zero. In view of the significant increase in the balances held in ES accounts resulting from the combined effect of the Bank's enhanced liquidity operations, bond purchases and the term funding program, maintaining a zero interest rate on these balances would increase the costs to the banking system.
Members agreed that such an outcome would be undesirable in the current environment. They endorsed the proposal to alleviate this cost by increasing the rate of interest on settlement balances to 10 basis points. No change to the arrangements for the top of the corridor were proposed. Members noted that the increase in ES balances would be likely to change the way that the cash market operates. In particular, large increases in ES balances could result in the cash rate drifting below the target as transaction volumes in the cash market decline, as had occurred in other countries in similar circumstances.
In considering the overall package of measures that had been discussed, members acknowledged that the term funding scheme and the three-year bond yield target were both significant policy developments that would not have been under consideration in normal times. Nonetheless, members strongly supported the proposed policy response as a comprehensive package to complement the fiscal response announced by governments in Australia in the preceding week or so.
Members endorsed the continuation of close policy coordination that had been taking place among the Bank, the federal and state governments and government agencies. They expressed the view that, in the Bank's communication, it would be important to emphasise that the Bank expected a recovery once the COVID-19 outbreak has been contained, and that the recovery would be supported by the low cost of funding across the economy.
<h2 id="the-decision">The Decision</h2>
The Board agreed on a package of measures, comprising four elements, namely:
<ul>
<li>a reduction in the cash rate to 0.25 per cent</li>
<li>a target of 0.25 per cent for the yield on 3-year Australian government bonds</li>
<li>a term funding facility to support credit to businesses, particularly small and medium-sized businesses</li>
<li>an adjustment to the interest rate, to be 10 basis points, on ES balances held by financial institutions at the Bank.</li>
</ul>
The measures would be announced in a media release at 2.30 pm AEDT the following afternoon, 19 March, following processes to ensure coordination of related policy announcements by APRA and the AOFM. The Governor would provide further elaboration and take questions at a press conference to be held at the Bank at 4.00 pm AEDT on the same day.
To read the meeting minutes on the RBA website, <a href="https://www.rba.gov.au/monetary-policy/rba-board-minutes/2020/2020-03-18" target="_blank">click here</a>.
</body></html>

jrobinson-rf4aSBido9

Monetary and fiscal policy to play important role in reducing economic and financial disruption: RBA March emergency meeting minutes

<html><body>
<h2>OPINION:</h2>

Earlier this month, I wrote about <a href="/expert-insights/buying/how-will-the-coronavirus-impact-australia-s-property-market">how the market will react to the Coronavirus (COVID-19)</a> before it became a pandemic. Now, three weeks on, we have seen the impact it has on numerous <a href="/guides/covid-19-how-to-adapt-to-working-from-home">businesses and our daily lives</a>. Currently, Australians are living through one of the <a href="/news/covid-19-how-the-world-previously-recovered-from-sars-and-whether-or-not-we-can-do-the-same-this-time-round">most significant economic and social upheavals</a> in our history.

For the real estate industry, the most direct impact from changes announced by the government would certainly be the social distancing restrictions prohibiting open inspections and auctions. These restrictions have forced a lot of new changes to the way they operate, including virtual inspections and online auctions. Last weekend we saw a mix of selling via online and phone auctions, as well as going back to more traditional ways of selling such as private sale or selling by tender.

Virtual Reality for real estate has been around for many years, allowing people to “try before you buy” without spending time and money travelling to scope out properties. However, the traditional open house has always proved popular as one can physically see, touch, hear and even smell the house and environment they may potentially be living in. But with these restrictions in place now, <a href="/guides">technology will again come into the forefront</a> and will eventually become the new norm.

While the industry is able to change and adapt, the more telling signs will be the impact on the number of listings and days on the market. From the seller’s point of view, if they are not under pressure to sell, they may hold off until after this pandemic is over. On the other hand, if we continue to see job losses, many house owners under financial stress may be forced to sell.

For investors, at a time when many people sit on the sidelines waiting to see what’s going to happen, many will see this as a great opportunity to buy a property considerably cheaper than they would have a few weeks ago and much cheaper than they will have to pay for it in 12 months.

The government has no choice but to offer relief for those affected by the crisis. The Prime Minister reinforces that they are “building bridges” to help us get to the other side. At this stage, it looks like commercial and residential landlords will be receiving some type of support, such as concessions on negative gearing and land tax. This will mean they will be asked to forgo rent, hence easing some pressure off renters. Already several major retailers, particularly those in shopping centres, have said they will not pay rent while closed. This is likely to extend to office tenants that are under similar stress.

The RBA and the government’s focus is on supporting businesses and households who will suffer significant income hits, forcing an emergency rate cut to a record low of 0.25%. RBA governor Phillip Lowe explained,

<blockquote>
“We are clearly living in extraordinary and challenging times, the Coronavirus is first and foremost a very major public health issue, but it’s also become a major economic problem and it’s having deep ramifications for financial systems right around the world.”
</blockquote>

It is still uncertain as to what the ultimate economic impact of COVID-19 will be, as well as what the fall out will be for property. However, with most economists accepting that we’re heading for, if not already in, a recession, some are wondering if COVID-19 will finally cause our property markets to crash. 

The bright side is that historically, after each global disruption, there has been a rebound and increase in property prices, and there is no reason to suggest this will be any different as the underlying property fundamentals are still strong.

<a href="/news/covid-19-understanding-what-you-can-and-cant-control-the-importance-of-cross-referencing-facts">Look after one another</a> and <a href="/guides/covid-19-how-apartment-dwellers-can-keep-themselves-safe-during-self-isolation">stay safe</a>.
</body></html>

Changes the real estate industry will experience as a result of the Coronavirus

<html><body>
Along with home delivery of groceries, pharmaceuticals and alcohol, demand for food delivery is booming.
Services such as Uber Eats and Deliveroo have become essential to cafes and restaurants that can now only sell takeaway food.
It is good news for the likes of Uber, whose stock price has risen since it announced a ten-fold increase in the number of restaurants signing themselves up to <a href="https://au.finance.yahoo.com/news/uber-eats-growth-coronavirus-delivery-140101683" target="_blank">Uber Eats</a>.
But it’s a situation that has provoked serious questions. Not only about whether delivery services are safe, but <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/radionational/programs/godforbid/the-covid-19-conundrum/12095750" target="_blank">whether it’s ethical to use them</a>.
Digital platforms like Uber Eats and Menulog are not, after all, ideal employers. In fact, they don’t regard themselves as employers at all, merely facilitators of work by “independent contractors”.
Food delivery drivers and riders often work for <a href="https://www.theguardian.com/australia-news/2019/nov/20/food-delivery-bike-couriers-in-australia-being-underpaid-by-up-to-322-a-week" target="_blank">less than the minimum wage</a>, and have no employee rights such as sick leave.
Now we are collectively relying on them to provide an essential service during social distancing, we need to ask what, as a society, we owe these workers in return.
<h2>Vulnerable to exploitation</h2>
We’re interested in how this economic crisis affects food delivery drivers and riders due to our research into the experience of migrant gig workers.
Our research has found migrants are already “socially distanced”, without deep networks of family or friends. They are vulnerable to exploitation and discrimination.
Most food delivery work is done by migrants, through third-party digital platforms like Uber Eats and Menulog. The platforms treat drivers and riders as independent contractors, not employees with the protections and rights of employees.
A 2019 survey <a href="https://www.premier.vic.gov.au/revealing-the-true-size-of-australias-gig-workforce/" target="_blank">commissioned by the Victorian government</a> suggested about 7% of the workforce used digital platforms to get gig work, the most common being Airtasker (35%), Uber (23%), Freelancer (12%), Uber Eats (11%) and Deliveroo (8%).
Previous research suggests <a href="https://theconversation.com/the-way-they-manipulate-people-is-really-saddening-study-shows-the-trade-offs-in-gig-work-79042" target="_blank">many choose gig work</a> simply because it is better than other forms of low-paid work.
Now food delivery workers face pressure from those displaced from such jobs in hospitality or retail. Complicating the situation is the lack of clarity about whether those on temporary work visas are <a href="https://www.theguardian.com/business/2020/mar/22/what-australias-189bn-coronavirus-economic-rescue-package-means-for-you" target="_blank">eligible for income support</a> announced for other workers.
Platforms don’t owe gig workers a minimum wage so can sign up as many “independent contractors” as they like. This improves the service for customers, and increases profit for the platform, but means individual deliverers make less money.
<h2>Increased health risks</h2>
Many delivery services are <a href="https://www.huffingtonpost.com.au/entry/coronavirus-australia-uber-eats-deliveroo-drive-thru_au_5e71a846c5b63c3b6486e11a" target="_blank">implementing contactless delivery</a> procedures. But the lack of defined employer responsibility in the platform economy means patchy attention to the extra physical and mental health risks gig workers now face.
Unions and others have urged delivery platforms <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/science/2020-03-06/gig-economy-workers-uber-deliveroo-ola-coronavirus-outbreak/12022072" target="_blank">to provide protective equipment</a> such as gloves, face masks and sanitisers. Responses from platforms have been limited.
This was Uber Eats’ response on March 17, by its regional general manager for the Asia Pacific, <a href="https://www.uber.com/en-AU/newsroom/covid19aus/" target="_blank">Jodie Auster</a>:
Our plan to address challenges born by COVID-19 includes making A$5 million in funding available for independent restaurants across Australia and New Zealand. The multi-million dollar fund will allow restaurants to deploy promotions to attract customers and will help restaurants time promotions to suit their individual business needs.
What Auster didn’t mention was a plan to issue safety gear, though she did note the company had started a campaign “reminding Uber Eats users that they can request deliveries be left on their doorsteps”.
Not surprisingly, delivery workers are scared <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/radionational/programs/drive/union-seeking-protections-for-delivery-drivers/12094366" target="_blank">they will catch the coronavirus</a>.
Uber says it will financially assist drivers and riders “diagnosed with COVID-19 or placed in quarantine by a public health authority” for a period of <a href="https://www.uber.com/en-AU/newsroom/covid19aus/" target="_blank">up to 14 days</a>.
But what if a worker with viral symptoms wants to self-isolate as a precaution? There’s no sick leave or workers compensation, and they risk “deactivation” if work isn’t accepted.
<h2>Legal protection</h2>
Social distancing measures mean the delivery economy and the health of the general population are now intimately linked.
To secure and safeguard this now essential service, it is time the law ensured gig workers have the same legal rights and protections as other employees.
We need the delivery drivers coming to our doors to be healthy. That health depends on their safety as well as <a href="https://www.theguardian.com/world/2020/mar/18/food-ordering-safe-ethical-coronavirus-with-seamless-uber-eats-should-i-get-takeaway" target="_blank">economic and social inclusion</a>.<img src="https://counter.theconversation.com/content/134406/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
<a href="https://theconversation.com/profiles/tyler-riordan-1002045" target="_blank">Tyler Riordan</a>, PhD Candidate, <a href="https://theconversation.com/institutions/the-university-of-queensland-805" target="_blank">The University of Queensland</a>; <a href="https://theconversation.com/profiles/gerhard-hoffstaedter-9125" target="_blank">Gerhard Hoffstaedter</a>, Associate professor, <a href="https://theconversation.com/institutions/the-university-of-queensland-805" target="_blank">The University of Queensland</a>, and <a href="https://theconversation.com/profiles/richard-robinson-958290" target="_blank">Richard Robinson</a>, Research Fellow/Hospitality Management, <a href="https://theconversation.com/institutions/the-university-of-queensland-805" target="_blank">The University of Queensland</a>
This article is republished from <a href="https://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/delivery-workers-are-now-essential-they-deserve-the-rights-of-other-employees-134406" target="_blank">original article</a>.
</body></html>

Delivery workers are now essential, they deserve the same rights

<html><body>
The novel coronavirus sees Australia facing major unprecedented health and economic crises. The key to preventing a downward spiral of the economy is to avoid a collapse in incomes of newly laid-off workers who won’t be able to afford what they normally purchase, and temporarily closed businesses which won’t be able to pay rents or other fixed costs, nor buy goods and services to trade.
It is likely that once a vaccine is delivered by science, or even before, the economic recovery will begin. Thus the question: what are the most equitable ways to handle this major short-term trauma?
There is an instrument that should be used to add to the size and efficacy of the necessary fiscal boost. Income contingent loans provide extra financial support without threatening future fiscal solvency.
<h2>What are income contingent loans?</h2>
Most people in Australia would be familiar with our HECS (Higher Education Contribution Scheme) for tertiary education fees. Students take a loan from the government to cover the cost of their university now, and pay it back when they are earning over a certain threshold in the future.
In what was a world-first, Australia implemented this style of loan scheme in 1989 and it has now been copied in <a href="https://www.sciencedirect.com/journal/economics-of-education-review/vol/71/suppl/C">around ten other countries</a>.
For those with a HECS debt, when incomes are low in certain periods, such as from unemployment, looking after an infant or caring for aged parents, no repayments are required at that time.
The government gets the money back later when the debtor’s financial situation has improved. This is known as an “income contingent loan”.
<h2>How could we use these loans for the COVID crisis?</h2>
It’s useful to distinguish three categories of financial stress that have emerged and which an income contingent loan could assist:
1) for individual employees recently, or soon to be, laid off
2) small businesses forced by health rules or insufficient trade to suspend activity
3) large businesses forced by health rules or insufficient trade to suspend activity.
Income contingent loans can be designed for all three cases although each is quite different.
1. Now jobless employees
For employees now jobless, a HECS-type system could take the form of the government providing a fixed payment (for example $5,000) per person. Some part of that payment would be required to be repaid according to existing (or new) HECS parameters.
Those people whose incomes do not recover repay nothing, or much less than those who regain their financial security (who would repay fairly quickly). The experience of 30 years of efficient HECS collection, including lessons learned, has shown us this would all be administratively straightforward.
2. Affected small businesses
In the case of an income-contingent loan for business, a different approach should be used, that doesn’t involve personal incomes. What is needed instead is a revenue-contingent loan – a system designed and promoted by Linda Botterill and Bruce Chapman nearly 20 years ago.
The reporting of business revenue is a quarterly legal requirement of business through the existing Business Activity Statement which is used to collect the GST. Unlike profits, revenue cannot legally be manipulated to suit the timing of repayments. The revenue-contingent loan obligation would be linked to the Australian Business Number.
In the case of a small business, the government could provide a loan, which would be capped at a level reflecting a firm’s capacity to repay when revenues recover. This could be a fixed amount (for example 25%) of the average of the past three years of annual revenue.
To minimise the chance of non-repayment, eligibility could be restricted to firms that have a good chance of future solvency as reflected, for example, in them having been around for a fixed number of years (for example three years).
The government would need to set a repayment rate, and past modelling has revealed small rates of say 5% to 8% of future annual revenues would be sufficient.
To make sure all this would be equitable for business and healthy for future budgets, the government would need to now model different loan amounts, and different collection and interest rates.
Modelling the different assumptions for budgetary planning would be required to be more precise about the policy details.
3. Bigger businesses
In the case of assistance for not-so-small business, the sums of money needed for the current situation necessitate the involvement of the banks in cooperation with the government.
Government is not equipped to take over large-scale commercial borrowing. But a revenue-contingent loan would still have an important role to play in such a partnership with commercial banks for current not-so-small financial borrowing needs.
The arrangement of joint bank and government lending would be the government providing a revenue-contingent loan which is a proportion of the bank loan. The government loan could repay the bank loan in the very short-term until business reopens and recovers.
A partnership of this kind would be ideal for business, which then has the capacity to repay the normal loan even when there is no short-term revenue coming in.
It would also be beneficial for the banks, which would then have far higher prospects of full loan recovery. It also provides a future return to the taxpayer for the government support of banks during these difficult economic times.
The provision of income contingent loans to individuals, and the revenue contingent loans for business, would have major potential to sustain the Australian economy during a sharp temporary downturn, while not putting additional pressure on future fiscal solvency. This is a bridge to a sustainable recovery.
The authors are fellows of the Academy of the Social Sciences Australia. However these views are their own and not representative of the Academy.<img src="https://counter.theconversation.com/content/134998/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
<a href="https://theconversation.com/profiles/linda-botterill-92314" target="_blank">Linda Botterill</a>, Professor in Australian Politics, <a href="https://theconversation.com/institutions/university-of-canberra-865" target="_blank">University of Canberra</a>; <a href="https://theconversation.com/profiles/bruce-chapman-2186" target="_blank">Bruce Chapman</a>, Director, Policy Impact, College of Business and Economics, <a href="https://theconversation.com/institutions/australian-national-university-877" target="_blank">Australian National University</a>; <a href="https://theconversation.com/profiles/glenn-withers-12585" target="_blank">Glenn Withers</a>, Professor of Economics, <a href="https://theconversation.com/institutions/australian-national-university-877" target="_blank">Australian National University</a>, and <a href="https://theconversation.com/profiles/warwick-mckibbin-9129" target="_blank">Warwick McKibbin</a>, Chair in Public Policy, ANU Centre for Applied Macroeconomic Analysis (CAMA), <a href="https://theconversation.com/institutions/crawford-school-of-public-policy-australian-national-university-3292" target="_blank">Crawford School of Public Policy, Australian National University</a>
This article is republished from <a href="https://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/give-people-and-businesses-money-now-they-can-pay-back-later-if-and-when-they-can-134998" target="_blank">original article</a>.
</body></html>

Give people and businesses money now they can pay back later (if and when they can)

<html><body>
EXPERT OBSERVER
Economists just love to forecast. And forecast often. Indeed they can’t help themselves – even when there is a paucity of past experiences to provide guidance, economists are out there forecasting.
At this stage, clearly it is near impossible to make accurate predictions. Much depends on how quickly the number of COVID-19 cases can be controlled. Also much depends on how quickly treatments and a vaccine can be found for the virus.
These are extraordinary times with no exact precedent.
The best approach to forecasting is shown by the International Monetary Fund, expressing in general terms the likelihood of a global recession in 2020 but not speculating on the size of the fall.
Australia is also at risk of recession. But it is important to note that the Reserve Bank and Federal, State and Territory governments are providing massive support for the economy and financial markets. The economic impact of COVID-19 is also quite variable across businesses and sectors. Travel, recreation and hospitality businesses have been most affected. But supermarkets, electrical goods stores, some transport businesses and sporting goods retailers have noted firmer demand. And infrastructure construction has been little affected.
Notably, in past recessions caused by an external shock (such as 1975 due to the oil price shock), the Australian economy has bounced back quickly. But again, much depends on how quickly the virus can be contained.
<a href="https://www.propertyobserver.com.au/images/2020/3/27/recessions%201.png" target="_blank">Click here</a> to enlarge: 
 <img src="https://www.urban.com.au/images/2020/3/27/recessions%201.png" alt="">
Source: CommSec 
The Global Financial Crisis (GFC)
The keenness for economic forecasting was certainly a feature of the Global Financial Crisis (GFC) – an economic event with few parallels. Economists were certain that Australia would follow the world into recession. But recession was avoided. (A recession is typically defined as two consecutive quarters where economic activity (gross domestic product or GDP) declines.)
In October 2008 and February 2009, massive stimulus was provided by the Government and central bank, and it worked to stabilise the economy. In fact when we look back at the GFC many actually believe that the economic support measures were too generous. The economy contracted 0.5 per cent in December quarter and GDP bounced back by 1.0 per cent in the March quarter. The economy didn’t experience another quarterly contraction in output until March 2011 (Cyclone Yasi) even including the period of the 2009 swine flu.
Past recessions
But this period is different. It has been caused by an external shock – and indeed a medical, not financial shock. Most downturns or recessions – both here and abroad – have occurred through financial means, basically policy mistakes. That is, central banks have responded to periods of “irrational exuberance” by lifting rates too far, causing people to cut spending, and causing businesses to trim spending, hiring of staff and investment.
So when have recessions occurred in Australia? There have been seven periods of recession since quarterly records were first maintained in 1959: 1961, 1971/72, 1975, 1977, 1981/82, 1982/83 and 1991 (many observers view the period from 1981-1983 as one event). Clearly there were also economic downturns before 1959 such as the Great Depression.
The common finding is that most of these periods of recession also occurred in advanced nations, notably the US. Most recessions occurred after a period of tighter financial conditions.
One downturn of note was 1975. And the US and other advanced economies also experienced recessions at that time. The US was in recession from November 1973 to March 1975. And a key cause was an external “shock” – a financial rather than medical event – the first oil shock in 1973 when oil prices soared by 400 per cent in response to an oil embargo. Central banks responded to soaring inflation by lifting interest rates.
In January 1973 the 90 day bank bill rate was 4.70 per cent. Rates steadily increased over 1973 and 1974, peaking at 21.75 per cent in May 1974. Ahead of the 1975 recession, 90 day bills still stood at 9.8 per cent.
Interestingly the Australian economy contracted by 2.6 percentage points over the September and December quarters of 1975 and then rebounded 4.4 per cent in March quarter 1976, expanding over the next year.
<a href="https://www.propertyobserver.com.au/images/2020/3/27/recessions%203.jpg" target="_blank">Click here</a> to enlarge:
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2020/3/27/recessions%203.jpg" alt="">
Source: CommSec 
Medical emergencies
Three medical emergencies that are most cited are SARS (Severe Acute Respiratory Syndrome) in 2003, swine flu in 2009 and the 1919 Spanish influenza. The SARS epidemic first appeared in late 2002 in Guangdong, China and ended in July 2003. Swine flu appeared in April 2009, extending to August 2010. 
The main impact SARS had on the Australian economy was on the travel sector. Australian GDP was weak in 2003, rising just 0.4 per cent in the first half before rebounding 3.4 per cent over the second half of the year.
Assessing the impact of the 1919 Spanish flu is complicated by the end of World War 1. It has been estimated that real aggregate gross domestic product declined by 9.5 percent between 1914 and 1920. The loss of 60,000 service people in the war depressed economic activity, and extended through the early 1920s.
Unemployment
In past economic downturns, unemployment has understandably lifted. But, as stressed, no two periods are the same. While Australia didn’t experience a recession in the GFC, the unemployment rate did lift in the slower economy – lifting from 4 per cent to 5.9 per cent in the space of 11 months. 
In the recessions of 1990-1991 and 1981-83, unemployment rose from 5-6 per cent to 10-11 per cent in around a two-year period.
In the current period, the jobless rate stands at a near 8-year low of 5.1 per cent. As the downturn has been caused by an external ‘shock’ the jobless rate will likely rise more quickly. A raft of retail, hospitality, arts and recreation staff have been stood down. However, job creation is occurring in supermarkets, grocery stores, some health businesses and delivery/courier businesses.
While unemployment will likely lift quickly to record levels, the government has lifted cash payments to prevent broader job losses. It is anticipated that jobless rates will fall quickly when the virus is contained and businesses are allowed to re-open.
<a href="https://www.propertyobserver.com.au/images/2020/3/27/recessions%204.jpg" target="_blank">Click here</a> to enlarge: 
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2020/3/27/recessions%204.jpg" alt="">
Source: CommSec 
<h1>Sharemarket impact </h1>
It may sound like a broken record but these are extraordinary times with no exact precedent. The volatility has been breath-taking as has the speed of sharemarket falls from highs.
After hitting record highs on February 20, the All Ordinaries index entered a ‘bear market’ 12 days later, down 21.3 per cent from highs. A bear market is generally defined as a fall of more than 20 per cent from highs.
The US Dow Jones index took 18 days to fall by more than 20 per cent from the February 12 record high. 
The key issue for investors has been the difficulty in valuing companies in response to a largely unique external shock.
Past sharemarket downturns have been induced by economic or financial factors. 
The speed of the current sharemarket contraction has similarities to the October 1987 sharemarket crash. On both occasions, sharemarkets were perceived to have become expensive, raising the prospect of corrections or a period of market consolidation to restore value for investors.
Interestingly, in the current period, sharemarkets initially were supported despite news of COVID-19. The initial perception was that the virus would be confined to China and the economic impact would be limited to ‘supply chains’ across the globe.
In 2007, it took 84 days for the All Ordinaries index to fall more than 20 per cent from the highs. In 1987, the sharemarket hit highs on September 21. It took 20 days for the All Ords to fall 10.9 per cent off its highs, before the massive 25 per cent fall on October 20.
Compared with 2020, again there was nowhere near the speed of falls in sharemarket declines over periods such as 1970-74, 1981-82, or 1990/91 when there were times of economic downturn.
Looking back even further
Data on the Australian sharemarket goes back to 1875 although the first sharemarket was formed in Melbourne in 1861. There have been numerous events and shocks over time to affect the sharemarket including wars, commodity price shocks (oil, wool), financial crises and the technology crash. 
But in terms of the severity of the downturn and volatility of the sharemarket, the COVID-19 virus crisis has few parallels. It is good to know that there is such a rich history of data to research. The important point is that each experience is different, especially in times of recovery from lows. But experience shows that it can take time for the sharemarket to regain highs. While no two periods are exactly the same, the sharpness of the current decline in share prices may lead to a quicker recovery process.
In relatively recent times, in 1960, it took 42 days for the sharemarket to fall 20 per cent from the September 16 high. It actually took 717 days for the sharemarket to regain its 1960 highs.
In the Great Depression, it took 6½ years for the Australian sharemarket to regain the February 1929 high. And it took more than 6 years for the September 1875 high to be exceeded.
Still, in weak economic times and affected by the Spanish flu, the sharemarket actually rose 19 per cent over 1919 and 1920.
Residential property prices
In Australia, consistent data on home prices goes back to 1980. It is also important to note that there can be marked differences in property cycles. For instance in the current environment, Perth and Darwin are at different points in the cycle from, say, Hobart or Canberra.
In the 1982 recession, house prices peaked in April 1982 and fell 6.4 per cent over the next year. It took 21 months to regain its previous highs.
In the 1990/91 recession there was no appreciable downturn in house prices.
In the 2007/08 GFC, house prices peaked in February 2008 and then fell 8.5 per cent over the next 11 months. It took 21 months for house prices to regain previous highs.
In the current period, house prices fell 9.3 per cent in the 21 months from October 2017. In the recovery since August 2019, house prices have lifted 7.8 per cent.
<h1>What are the implications for investors?</h1>
These are extraordinary times. Australia and the globe are experiencing a shock like no other. But it is important to note – unlike periods such as the Great Depression – governments and central banks are ‘doing all that it takes’ to support businesses, workers and the more vulnerable members of society. 
Labs are working on vaccines and treatments such as those for malaria and tuberculosis are showing promise in killing the virus.
Economies were in good shape ahead of the crisis, in fact it was hard to find better economic ‘fundamentals’ in Australia.
While it will be hard to avoid recession in Australia, it is not impossible. Sharemarkets will settle when virus cases peak (the curve flattens). And while unemployment will likely lift to historic highs, people will quickly return to work when businesses are allowed to re-open.
<a href="https://www.propertyobserver.com.au/images/2020/3/27/recessions%202.png" target="_blank">Click here</a> to enlarge: 
 <img src="https://www.urban.com.au/images/2020/3/27/recessions%202.png" alt="">
Source: CommSec 
CRAIG JAMES is the chief economist at <a href="https://www.comsec.com.au/default.aspx" target="_blank">CommSec</a>.
</body></html>

COVID-19

Editor's Picks

Have something to contribute?

Developments

New apartments

New townhouses

News

COVID-19

Editor's Picks

Receive the latest news stories to your inbox

Have something to contribute?

Developments

New apartments

New townhouses

News