Publications

- June 1, 2020: Vol. 12, Number 6

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A new normal: The Australian economic and policy response to COVID-19 for property investors

by Dinesh Pillutla

COVID-19 has heavily affected the Australian A-REIT sector during the past few months. From its peak on 20 February 2020, the S&P/ASX 300 A-REIT Index suffered a 49.3 percent decline over the course of only 22 trading sessions to 23 March 2020. Over the next 18 trading sessions, the A-REIT sector bounced back 29.4 percent, resulting in a net overall decline of 34.4 percent.

A-REITs have experienced greater volatility than the broader S&P/ASX 300 Index, which declined by 36.8 percent before rebounding 18.0 percent, with a net overall decline of 25.3 percent over a similar time frame. The impact has been more pronounced for the real estate sector, as investors have been concerned about the earnings impact to the sector, in particular to retail. It is worth mentioning the S&P/ASX 300 A-REIT Index is overweight the retail sector, and the current uncertainty is likely to create a heightened risk-off approach to this index.

The Australian listed market has behave

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