If you are contemplating whether to purchase or not, you are not alone. With crisis across health, employment and economy at large, making a significant decision such as property purchase can be daunting, be it for investment or for you to live in.

While the media and property gurus have been predicting 30% or more drop in prices, the property market has been extremely resilient, and we have hardly seen any distressed sales in the market.

Many lenders offered pause on mortgage repayments up to 10 months, which has helped many families whose finances may have been impacted due to COVID-19.

So how was property market tracking pre-COVID?

Prior to first lockdown in March 2020, Melbourne property market was on an upward streak. After been resilient to almost 3 brutal years of suppression due to change in inner city planning policies, renewed design guidelines, end to stamp duty concessions for off the plan investments, Royal Commission enquiry into the Banking and Financial Services industry and APRA imposing stringent lending restrictions on banks and other financial institutions.

A bit about the Australian economy…

Major ratings agency Moody’s has reaffirmed Australia’s AAA credit rating and maintained the stable outlook supported by the “underlying resilience of the economy” and our “track record of proactive and effective policymaking.”

Australia entered this crisis from a position of economic strength which, in the words of Moody’s provided, “scope for the government to implement very large fiscal policy support packages.”

The Morrison Government’s economic response to the Coronavirus crisis is providing $260 billion or 13.3 per cent of GDP in support for workers, households and business.

If you are looking for investing in property…

Time you hold on to your property is way more important than the time you purchase your property. 

In comparison to the stock market, we don’t see a free fall in property markets during the crisis situation.  Property transactions are inherently slow-moving, it has higher transaction costs and has the advantage of being less liquid, which can help cushion the impact of the current crisis.

Australia has seen a growth of 412% over the last 25 years, according to Aussie/CoreLogic 25 years of Housing Trends report.

We all know past performance is not an indicator of future outcomes but looking at some historic numbers can give us some insights into the property market.

It is evident from the graph above that over the years property has grown in value despite of some declines along the way including the periods of national and global crisis like 9/11 in 2001 and GFC in 2008.

If you have a bit of savings or equity in your property, a secured job and wanting to start your investment journey or accelerate your current portfolio, there are many opportunities in the market right now that you can benefit from.

If you are looking for your first home…

HomeBuilder Grant requires buyers to have their building contract signed by the 31st of December 2020, while Home Loan Deposit Scheme, which allows eligible home buyers to borrow up to 95%, has limited spots. 

With historic low interest rates of around 2%, less competition in the market and up to $65,000 in benefits in Victoria for first home buyers, this is an opportune time to buy your first home. 

The key thing to take into consideration is your job security, savings and your buffer savings for any unforeseen situation.

Road to recovery post COVID…

The Australian Government is committed to delivering a $100 billion, 10-year infrastructure pipeline. This long-term commitment to build the transport infrastructure Australians need to meet the challenges of a fast-growing population, while improving safety and productivity, will support jobs and the economy to help stem the economic impact of COVID-19.

The Australian Government will continue to support jobs by delivering $1.5 billion in infrastructure investment:

• $1 billion in funding for shovel ready projects that can commence within 6 months.

• $500 million for Targeted Road Safety Works delivered by states and territories that can be completed within 12 months.

For a long time, Australia has been considered as the safe haven and has withered the various storms be it SARS or GFC.  We have seen increasing amount of high net worth individuals moving into our country post those global events and highly likely the trend will continue post COVID.

Where to from here…

Whether you are considering to purchase your first home, next home or an Investment Property – it is more imperative than ever to make an informed and guided decision.

At SONI, we are big on educating our clients and help them figure out all the unknowns. We simplify Property Investment with our Experience, Knowledge and Passion.  Our team is here to help you create your personalised strategy unique to your circumstance and aspirations. 

Reach out to us now for a no obligation virtual catch up.

Remember…

When it comes to property, period of growth and slump is inevitable and often hard to predict. 

Fact “PROPERTY IS A LONG-TERM GAME”