Job losses are likely to reverberate through the housing market in coming months. AFP/File/Frederic J. BROWN
The property market is getting battered by the coronavirus and its impact on the economy. But why should that matter, given the financial collapse all around us?
The reality is that property is the foundation on which a strong middle class is built. Houses – or more correctly, homes for young stable families – are vital for the sort of economic stability which this country needs to get going again in the wake of the Covid-19 destruction.
The outlook, though, is ominous. Property sector experts are predicting that as many as one-third of all property renters are going to go into default in the next quarter of the financial year. That is inevitable, given that many will have either lost their jobs through businesses folding or through having their salaries cut as companies battle to survive.
That is, obviously, bad news for landlords and, in turn, for the construction industry because speculative investment in bricks and mortar could dry up.
At the same time bond payers will get little respite from “payment holidays” because these will only keep the wolf from the door for a short while.
Government must give serious consideration to emergency aid for people who rent and those who pay bonds.
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