Months of COVID-19 related shutdowns across Australia has caused many to pause and rethink they way they work their investments and also their property purchases. Many speculate a downturn in house prices, but the evidence has not yet been shown. So the important question for investors or aspiring investors is, ‘should you purchase during or post COVID-19? Or should you delay?’
The answer isn’t simple and really will depend on your personal situation and the advice your experienced mortgage broker (such as the team at Lending Specialists) and your bank. Here are some aspects you should be aware of and take into consideration in the meantime:
- Were you in a position to purchase pre-COVID?
If you were in the position to purchase a home before COVID-19 and your financial situation has not changed, then now could still be your ideal time to purchase. If nothing has changed for you and you’d like to purchase soon, you can still go ahead with the advice of your mortgage broker.
- Should you wait for housing prices to move?
Although, many are speculating and even forecasting a drop in property prices, the extent of COVID-19’s impact on Australia’s property market is not yet known. So far, it’s clear there has been a financial impact across the board, particularly in labour force statistics. Many Australians have also taken up the various offers from banks to defer mortgage payments or received Government support during this time. Some experts are forecasting a temporary fall between 10 and 30% in property prices. If 10-30% will help you greatly, then you should take some time to see if the prices drop. Also, some sellers may withhold their house from market until the economy settles so there may be less options for you to purchase.
- Are you eligible for Government support?
If you are eligible for Government support such as first home owner’s grant or investor deductions, then it’s really your choice when you purchase. Just remember, many grants change so you shouldn’t delay for long periods of a year or more. Speak with your broker about what is available to you.
- Should you take advantage of low interest rates?
The Reserve Bank of Australia (RBA) has dropped interest rates to significantly low levels over the previous quarter due to COVID-19. This means that many Australians are able to save on their interest rates. If this will provide significant assistance for you, you should look further into purchasing right now. However, always remember interest rates can rise if you select a variable interest rate so you need to know your personal financial situation well.
- Is now the time to be a landlord?
One of the key aspects of COVID-19 is to consider whether or not now is the time for you to be a landlord. With many Australians struggling to pay rent due to a loss of income, some property owners have suffered. Whilst the Government has provided some assistance to landlords, you may want to consider the potential of renters not being able to pay rent during this time.
To buy or not to buy?
Purchasing during or post-COVID-19 is a very personal decision, which should be made based on your current financial position and by forecasting your potential future situation. Also, speaking to your bank or mortgage broker and keeping across the property market is the key.
- Are you financially stable and at low risk?
- Do you need to purchase now or could you delay?
- Have you engaged the right advisors?
Gaining the advice of an experienced mortgage broker with years of experience will help you make the right choices. They will be best placed to advise you on the state of the property market, your personal finances, your options for purchase and other key considerations.
To gain access to mortgage experts with decades of experience, contact Lending Specialists today.