Property as a whole remains an attractive asset class particularly when comparing yields to bond rates, combined with the current low interest rate climate. With the Reserve Bank of Australia cutting the official cash rate to a record low of 0.10% in November, and further quantitative easing measures introduced we will see bond yields fall closer to zero.  The COVID-19 pandemic has impacted all property asset classes in Australia to some extent, with both positive and negative outcomes.

The retail sector has been the hardest hit as a result of store closures, reduced foot traffic and weak consumer spending. Total returns for the sector were recorded at -9.4%, with capital growth falling -13.1% (MSCI latest available). It is evident that retail as an asset class will continue to face the greatest amount of challenges throughout this recession, and despite a lack of forced sellers currently in the market this may change in the next 6-12 months, as government stimulus packages such as the JobKeeper and JobSeeker which have helped to keep unemployment relatively low, continue to reduce and near an end.