02 Mar Property, Should I Buy Now?
On the 28th April 2020, right in the middle of COVID-19 we ran a joint webinar with Dr Tony Hayek from Blue Wealth Property. The purpose of the webinar was to give our audience an idea of what Dr Tony Hayek predicted would happen to the Australian property market during and post COVID-19 based on previous financial crises.
Dr Tony Hayek predicted that property will stagnate through COVID-19 and that the property market would recover rapidly and even see increases once we were out of COVID-19. Dr Tony Hayek copped abuse from some of our audience for pushing an idea that was unbelievable to some.
Fast forward 10 months and auction clearance rates in Sydney are 83.4% and Sydney prices have increased by 2.5% in February 2021.
What’s causing this?
Increase In Household Savings
Typically, we would spend thousands of dollars on an overseas trip every year, this year we couldn’t spend that money, so we bought TV’s, did renovations and tried to buy a new car. However, as a general statement we didn’t spend as much as we usually did, less entertainment also contributed to an increase in savings.
Pent-Up Demand For Property
Last year many Australians put their property purchases on hold, due to the lack of clarity around the economy, property prices etc. These same people are still looking to buy, but now that there is clarity, so is everybody else. There are now more buyers than sellers, hence the demand for property has increased.
Lack Of Stock In The Market
If we have more buyers, why do we have fewer sellers? That’s because many people do not have to sell their property. With the significant support provided by the governments like, JobKeeper, Job Seeker, Mortgage Pauses and small business support, most people avoided being under financial stress.
Record Low Interest Rates
With the lowest interest rates on record, why should people sell? Lower interest rates, mean lower repayments, so if you can rent your property and the rental income can cover your mortgage, why not hold your property and watch it grow in value without putting a cent towards it. My personal rental income from my properties is well above my repayments and many investors are in the same position.
Certainty
Human beings like to be in control, which means when there was uncertainty in the economy, most people were waiting to see what was going to happen. Would we go into a recession? Would we all lose our jobs? Will the property prices drop by 30% like CBA predicted. We now know that the many of the negative things ‘predicted’ by the media actually happened, property is back on the agenda for most people. I was actually fortunate enough to purchase an investment property in June 2020 and since then, the property has increased by 24%.
Do you think now is a good time buy a property?
If you’d like to discuss if it’s the right time for you, all you have to do is contact us to begin the journey.
“The fishermen know that the sea is dangerous and the storm terrible, but they have never found these dangers sufficient reason for remaining ashore.” – Vincent Van Gogh
Thank you for reading
