What Does the Recession Mean for the Australian Housing Market?
The Australian housing market right now is facing uncertainty. In the past, during the Global Financial Crisis, Australians don’t feel the economic impact as heavily as other countries. However, the current situation may incite potential investors to enter the market; and/or rent out their real estate for a fixed rental income as stability takes its toll in the market.
The Implication of a Potential Recession for the Australian Housing Market.
The implication of a potential recession in the Australian housing market can be broken to 2 perspectives:
- The duration of COVID-19’s impact and,
- the alternative investment options available.
If COVID-19 is still an ongoing issue after the announced 6-month lockdown; there’s likely to be government support prioritizing buyers and sellers; as we are currently seeing happening. On the other hand, if the government can mitigate and contain the COVID-19’s impact within the next 6 months; there’s a likelihood of continuous market growth, rental increases, and investors looking for stable rental incomes than blocking huge capital.
First Home Buyer Perspective
From a first home buyer perspective, there seems to be an undersupply of the property market. This is likely due to external factors such as the annual population growth exceeds the number of homes built. As a buyer, this uncertain time may prove to be potentially an ideal time to prepare to buy the property you’ve always wanted. Why?
Right now interest rates are at a record low, which could provide as a motive for first home buyers to purchase their dream homes. There are also other government incentives and schemes to support first home buyers during the COVID-19 pandemic.
If you are looking into buying a property, it’s important to note that COVID-19 has made in-person valuations difficult to conduct. Some lenders may want to meet face to face, in which they might delay your meeting during this lockdown. Therefore, getting a pre-approval will be important.
There are opportunities for individuals and businesses that they can take during these difficult times. Many lenders are also offering support for those facing financial hardships by offering to defer their repayments until you are back up on your feet. At Benevolence Financial Group we are offering individual support, and we are also offering support packages to small businesses. Contact us now to find out more.
Disclaimer: The information provided is general in nature and does not constitute financial advice. Please speak to us for recommendations on your individual circumstance and requirements.
Mitchelle Katsande is Head of Marketing and Communications at Benevolence Financial Group. Mitchelle currently holds a degree in International Business and Finance and is currently supported by Macquarie University Incubator and City of Parramatta Council.