Will COVID-19 crush our property markets?
COVID-19 is a health issue, but the fallout from it isn’t just health effects, it has social and economic effects too.
And yes, it will affect our property markets.
That’s what we’re going to talk about today.
In addition to my own thoughts, I’ll be talking to Dr. Andrew Wilson about what’s going to happen with our property markets, whether all this will cause a recession, and what you can do.
Then, I’ll have a chat with Andrew Mirams, director of Intuitive Finance.
We’ll talk about how the banks are doing, what you can do and how the banks can help if you’re in financial trouble, and what you can do if you’re not in financial trouble and are in a position to use your finances strategically.
Things are changing fast right now, but hopefully, after today’s episode, you’ll have a bit more clarity about where the property markets and finance are headed.
Property Insiders with Dr. Andrew Wilson
The property market is at least partially shut down and may be shutting down completely soon.
However, we will get through this, and the market will reopen for business.
And when that happens, we’ll be in a better position than we might have been under other circumstances.
COVID-19 is a health issue, not an economy issue.
The fundamentals of the economy are still strong.
The government and Reserve Bank are looking into ways to lessen the immediate impact on citizens who will experience financial difficulties because of this pandemic.
Yes, we will go into a recession.
But we’re in a better position to recover than we were following the global financial crisis in 2008-2009.
There are large buffers of capital and liquidity in the system. We have a strong banking system, and the banks are stepping in early to help.
Consumer confidence is likely to fall in the near future, and of course, that will have an effect on the market.
But experienced investors who have lived through a couple of property cycles and who have secured jobs tend to see this as a short-term blip, not a reason to change their long term investment journey.
The banks are open for business
Despite the crisis, banks are open for business.
In fact, they’ve been given a $90 billion lifeline to go out there and lend money and stimulate the economy.
Bank regulators are taking a common-sense approach in these uncertain times, and our banks are lending more freely in the short term than they have in recent times.
If you’ve run into financial difficulty because of COVID-19, there are options.
If you are paying more than the minimum required repayment on your mortgage you can reduce the repayment to the minimum repayment anytime without charge with your lender.
You may also be able to take a repayment holiday or payment pause.
Just remember that the lenders aren’t waiving your repayments or obligations but simply deferring them.
Asking to pause or postpone your interest payments in these unusual times will not affect your long-term credit rating as it normally would do.
If you’re in a good financial position and you have a sound job, this is a great time to take advantage of the property markets.
Remember, the underlying fundamentals of the economy are still strong, and good investment-grade properties will still hold their value.
If you’re in a position to do so, now is a good time to take action and set yourself for the opportunities that will present themselves as the market moves on.
Links and Resources:
Subscribe to my weekly Property Insiders Video chats with Dr. Andrew Wilson at www.PropertyInsiders.info
Andrew Mirams, director of Intuitive Finance
In turbulent times like this why not get the team at Metropole on your side – find out more here
Some of our favourite quotes from the show:
“The underlying factors are still positive.” – Michael Yardney
“I think we’ve come into this terrible crisis with a much better situation with our banking system than we did with the global financial crisis in 2008-2009.” – Michael Yardney
“If you’re in trouble, ask. Don’t try and sort it out on your own.” – Michael Yardney
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