Property market versus Covid
“Hello and welcome back to weekly buying tips I’m Dean Berman from Berman Buys.
Today I want to discuss what’s been happening in the property market since the start of Covid around March 2020?
I would have thought by now there would have been a greater impact on the general property market.
I believe there are 4 key factors keeping the market relatively stable to this point.
1) Supply – during 2020 there has been low total listings around the country, resulting in low supply of properties to purchase. I often see markets where nothing comes to market for a few weeks. What do you think will happen when that next listings comes up…competition.
2) Lending – lending rates have gradually declined over 2020 to record low levels, making finance affordable. When finance is affordable, this makes buying a much easier choice as it can often be comparable or cheaper to renting.
3) Government incentives – particularly for first home buyers have kept demand and competition for available properties strong. This includes increased purchase prices to still gain government incentives and or purchasing new style options or building a brand new home.
4) Job keeper/seeker – these payments have helped many businesses keep many staff employed, enabling subsequent flow on spending in the economy. This flow on spending has helped many other businesses benefit through the multiplier effect.
I think there will be a portion of home owners who will need to sell over the coming months as financial hardship and deferment of mortgage repayments provided by the banks eases.
Also potential easing of job keeper and job seeker may potentially impact. I would think those markets most affected would have lower levels of savings rates and higher gearing levels.
In general though, over the last 8 months or so, I feel these 4 factors combined are in many ways beating Covid.”