What does this pandemic mean to Property enthusiasts or investors?
We are in uncertain and unprecedented times, but there is no need to panic. As you suspect, the property market has been under pressure.
Tolerance from the banks for borrowers facing financial hardship should help to stymie the number of distressed properties hitting the market. Similarly, the massive stimulus packages will help to support job retention and incomes. The RBA's stimulus measures should curtail the need for homeowners to panic sell. The volume of activity will shrink massively. The temporary nature of the crisis means that most homeowners would try to weather the storm, hoping for an eventual recovery once the virus is contained and economic conditions improve. The long term fundamentals are, however, still intact.
Not all markets will be impacted equally
Even the impact will not be consistent across all the markets. The more expensive end of the property market will likely be the hardest hit. It always is when the stock market crashes. At the other end of the market cheaper, blue-collar suburbs where the local workers can't perform their jobs remotely and where there is a higher incidence of casual employment, are likely to suffer significant price drops. However, well-located homes in established middle-ring suburbs are likely to hold their values better.
Considering that we are likely to have a short sharp recession followed by a fast rebound, our property markets should pick up underpinned by pent-up and rising demand at a time of low supply.For Long term buyers (cashed-up investors or owner-occupiers) who have job-security, great opportunities will surface. But do not rush to buy unless it is an opportunistic purchase where the sombre environment is priced in.
How to be better prepared today
Today might not be the best time to go on a spending spree. However, it's undoubtedly the right time to save some money and get ready for the right opportunity to spring in.
Here are some tips (4Rs) on what you could do right now.
Review your Insurances - particularly your landlord insurance.
Refinance your home loan - Some banks are now offering rates as low as 2.26%.
Repackage your debts
Release your equity - This will sit as cash in your offset account.
More importantly, be a responsible citizen. In times like these, we all need each other to show love, compassion and support. We together can win this war.
Please stay home, be safe and look after each other.
Disclaimer: This article is general in nature and does not take into account your situation. You should consider whether the information is appropriate to your needs, and where applicable, seek professional advice from a financial adviser.
