42% of Australians have delayed financial decisions due to COVID-19 and lockdowns in 2021

Almost half of Australians have delayed financial decisions due to COVID-19 lockdowns in 2021.

Despite the nation’s continued economic resilience in the face of the Delta strain, Australians are holding back on certain expenses, with 42% delaying financial decisions as a result of COVID-19 and lockdowns this year, according to new research by Canstar.

Canstar’s national sentiment checker of more than 1,000 Australian adults completed last week found that of those who have delayed financial decisions this year, 32% have put off paying bills on time, while 23% have avoided changing jobs in an uncertain market.

Interestingly, the results also found that of those Australians who have deferred financial decisions, more than twice as many have delayed buying a property (27%), than selling a property (12%) this year.

This is despite Reserve Bank data showing strong demand from owner-occupiers, including first home buyers and investors.

Canstar’s Group Executive, Financial Services, Steve Mickenbecker said,

“The depth of pain being felt by those Australians who have had to change their financial plans during COVID-19 and lockdowns is clear, when you see paying bills, medical procedures, renewing insurances and even doing their tax are among amongst the most likely financial decisions people have deferrals this year.

Australians can dig themselves into an even bigger financial hole by deferring certain payments like bills or renewal of insurances, but when faced with tough times some desperate decisions result.

Even though we know that property supply has thinned, deferred purchases are outweighing sales by more than two to one.

Demand for property stands to hit the market harder while we stay locked down.

The combination of ballooning housing debt, cheap lending and rising property prices is putting mounting pressure on the Australian Prudential Regulatory Authority to tighten lending standards and reduce the risk of financial instability.

However, with the impact of the latest lockdowns on GDP unlikely to be felt until the September quarter, regulators will likely take a ‘wait and see’ approach before acting.

Australia’s economic recovery hinges especially on a high vaccine uptake. Until we’ve hit that milestone and parts of the country can open back up, the nation’s economic future hangs in the balance.

It is understandable that many Australians would rather hold off on making major financial decisions and squirrel away whatever funds they can until life ‘returns to normal’ - whatever that may look like post-lockdown.

Despite property affordability continuing to plague a generation of first home buyers, it is unlikely the Reserve Bank will hike interest rates any time soon, especially while inflation remains below the 2-3 percent target, and wage growth stays sluggish.

With no cash rate move expected for this month, there is no relief in sight for savers and retirees living off savings, and home borrowers are going to have to take matters into their own hands and seek out one of the amazing deals for refinance.”

About Brett Warren Brett Warren is National Director of Metropole Properties and uses his two decades of property investment experience to advise clients how to grow, protect and pass on their wealth through strategic property advice.