The impact of COVID-19 and the property market
Economic uncertainty created by the COVID-19 pandemic has many Australians wondering if now is the time to invest in property. Let’s take a look at the state of play.
As lockdowns ease in most parts of Australia, our attention is turning to the economic influence of the COVID-19 pandemic—particularly the property market.
Following such rapid and unexpected change, what’s the state of play?
A bird’s eye view
An overarching look at the Australian real estate scene reveals that things are a bit unpredictable.
For example, in June 2020, Sydney prices dropped by 0.83%, while Hobart prices rose by 0.34%, according to CoreLogic. For prospective property buyers in New South Wales, this could look like an opportunity, particularly given that home loans are more affordable, with the Reserve Bank having kept the interest rate at 0.25% for some time now.
At the same time, there are other factors to keep in mind. The Australian Government seems set on stimulating the construction industry, through various initiatives, including soon-to-be-available grants for new builds and renovations.
And the 2020-21 Federal budget, originally scheduled for announcement in May, won’t be revealed until early October, having been delayed because of the COVID-19 pandemic.
Property buyers and the state of play
There’s plenty for property buyers to feel excited about, as long as they are informed about the state of play and take a calculated approach to investment—from thinking carefully about where to buy, to planning for unexpected events.
One important aspect of this is putting protections in place, including insurance policies. It’s helpful to know that, even if you suffer an illness or injury that prevents you from working, you’ll be able to make repayments on your mortgage.
For example, income protection insurance can pay you a monthly benefit if you’re unable to work due to a sickness or injury, while total and permanent disability cover pays a lump sum if you’re unlikely to be able to ever return to work again.
You may also wish to consider life insurance, which pays a lump sum if you pass away. Among many other things, this payment can be used to help pay down a mortgage.
Keeping an eye on the big picture
For many prospective property buyers, a financial adviser can help with the big financial picture, by looking at how a mortgage might fit in with existing commitments—from day-to-day budgeting to retirement plans. If you want to look at your financial plans and review existing commitments, get in touch.
