What may happen in the property market over the next 6-12 months
“Hello and welcome back to daily buying tips, I’m Dean Berman from Berman Buys.
Today we’re going to talk about what may happen in the property market over the next 6-12 months.
I think the government and the banks will play a leading role here.
Property is fundamentally governed by supply and demand.
Supply side issues can occur if multiple owners, are forced to sell at the same time i.e. as they cannot continue to repay their mortgages.
The government and the banks can and should step in, in my opinion to help people in financial hardship such as freezing mortgages for at least 6 months.
The people that will feel this period the hardest in my opinion are the ones in industries where social interaction and public gatherings takes place.
These can be both small business owners and their staff and supporting industries.
Industries such as hospitality, tourism, retail and entertainment.
The other sect are those who unfortunately lose their jobs or are forced to take unpaid leave.
These people will need help.
My solutions if you are in such a position and can’t afford to pay your mortgage.
Maybe rent out one or a few of your rooms for a few months.
I know this isn’t ideal, but that extra income may help in getting you through this tough period of time.
If possible, find a way to turn an unused space into a habitable room such as a garage.
Those extra few hundred dollars a week may make a massive difference to your cashflow.
Landlords need to show empathy at this time.
This isn’t just residential, but also commercial.
These are people with families, before these last 2 weeks, they were happily tracking along.
All of sudden everything has changed.
The big retail landlords such as Westfield, Vicinity, Stockland, QIC and GPT to name a few.
The bulk of your tenants will likely be struggling at this time.
Walk around the shopping centres and you will see for yourself.
Find a solution to make it fair for them.
The other aspect which can greatly affect supply is fear.
Fear, if prices go down, you want to get out before they may fall further.
This is FOMO 101 and would be regarded as the worst way to deal with such a time.
The best advice I can provide is simply, see it out.
Don’t just sell, unless you absolutely must.
Prices will come back.
You need to stay calm.
There is a chance stock levels i.e. newly listed properties may move at below average rates.
I.e. less properties will be listed.
This could also cause prices to stabilise in some areas.
The general thinking is prices will likely decline in many areas, due to sentiment though.
I think some buyers who are in secure jobs and have ample savings and borrowing capacity, will probably be watching what happens and identifying any opportunities they see.
A portion of the market may sit it out.
These might be those in uncertain employment positions.
Whichever place you fall into the market.
Remember we are all in this together.
An interesting quote to think about at this time.
Aristotle once said, “The whole, is greater than the sum of its parts.”