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 Ho-bart 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 be-cause 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 go through a mishap that prevents you working, you’ll be able to make repayments on your mortgage.
For example, income protection insurance may cover you, if you're unable to work temporarily, while total permanent disability cover may ensure you're looked after in the case of a serious long-term health issue.
You can bundle either or both of these with life insurance.
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.