The Australian property market has fared well and survived countless economic shocks. Still, there remains no clear-cut evidence of its potential performance during and after the COVID-19 pandemic. What is evident is that property transactions have dropped — and so have property costs and interest rates.
Given the low rates, it can be tempting to buy a home or invest in a new land. Maybe, now is the time for you to finally consider investing in house and land packages? But is it wise?
Should You Buy a Home During the Pandemic?
The low-interest rates, as tempting as they are, will not last for long. Keep in mind that property prices will bounce back once the economy gains its footing again. But lower interest rates do mean lower repayments since banks are becoming more stringent with their lending policies.
If you have a stable job and income, you have higher chances of securing a home loan approval. It’s best to get preapproved now before the cascade effect of COVID-19 on the economy and lenders. Also, prioritise making repayments on time
What If You’re Already Preapproved for a Loan?
Will there be any problems if you’re already preapproved for a loan?
Lenders and brokers have started reviewing preapproved mortgages, especially from applicants who are experiencing financial struggles due to reduced hours or loss of jobs. Lenders are under no legal obligation to fund your loans. Even on the day of a settlement, they can withdraw the approval if they deem it right to do so. Most lenders require recent payslips or any kind of employment check before they offer loan payouts.
Lenders are working in your best interest. They aim to ensure that taking a loan will not put a financial strain on you.
Is It Possible to Buy or Sell During the Pandemic?
You can because there are no restrictions that will prevent you from selling or buying a home. The home buying process has changed, after all. Real estate agents now offer private inspections and virtual tours— the latter being a plus during the quarantine.
You can also sell your property via virtual auctions. These auctions operate in the same way as traditional physical auctions, except the buyers bid online.
But if you have sold or bought a house prior to the pandemic and have not exchanged contracts yet, it’s best to delay moving house. But if you have already exchanged contracts and must complete the transaction, practice social distancing guidelines.
Also, consider the following:
- If you are a buyer:
- Get preapproved before you make offers
- Ensure you have a stable source of income
- Get a buyer’s income
- Avoid overpaying
- If you are a seller:
- Go for online auctions
- Consider selling off-market
- Avoid panicking and selling homes ASAP
The pandemic might have affected some areas of real estate but it has not crippled it. You can still buy or sell a home but with limitations and precautions. If you’re concerned about marketing costs or inspections due to social distancing measures, work with a trusted real estate agent.