5 misconceptions about the property market during Covid-19

Aussie Brokers can help you navigate your property goals through the uncertainty of COVID-19

20 August 2020|5 minute read

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During these unprecedented times, it’s understandable that you might be feeling uncertain about how to reach the property goals you set out to achieve this year.

If you are feeling this way, the good news is that you aren’t alone – 6 in 10 Australians believe that their goals are harder to achieve because of the COVID-19 pandemic.

The impact of COVID-19 has cast doubts for some Australians who are planning to buy or refinance their home because they’re unsure whether now is a good time for them to act.

Despite this doubt, there is still some confidence to be found in the property market no matter what your goals are.

Five common misconceptions

Aussie Brokers can help you get closer to achieving your property goals by clearing up the confusion, including the five common misconceptions below.

1. I'm going to wait until property prices fall further

With the impact of COVID-19 on our economy, there is some speculation that the property market will continue to fall, as house prices decline. This is causing some people to hold off on their property plans, assuming it’s the right thing to do.

House prices may have dropped recently, but the decline is smaller than first predicted during the height of the pandemic. So, if you were ready to reach your goal of home ownership this year, there is no reason why this should stop you if it’s the right time for you.

Finding a home is an exciting personal journey. Whether you are buying your first home, wanting to downsize or upgrade, it’s important to seek expert guidance to help you find the right deal for your circumstances right now.

2. I'm better of waiting until interest rates drop further

When it comes to interest rates, predictions vary. Some Australians believe the official 0.25% cash rate set by the RBA is here to stay, while others are waiting for it to drop to a zero rate. There is even some speculation about a negative cash rate! All this conflicting information can create confusion.

Home loans are a long-term financial commitment and while the current cash rate is at a historical low - now could be the right time to buy or refinance a home.

3. It's harder to get a loan approval during COVID-19

Getting a home loan approval can sometimes be daunting even at the best of times. Let alone thinking about how the pandemic may be impacting your cash flow and savings balance.

In fact, research commissioned by Aussie found that 7 in 10 Australians believe that job security will prove to be a challenge in achieving their property goals.

It does take time for lenders to assess a loan application, so getting pre-approval to find out how much you can borrow is a good way to understand where you stand. Even if your personal circumstances may have changed due to COVID-19, a quick chat with an Aussie Broker could help you understand your options.

4. Refinancing is hard and not worth it

Mortgage repayments are often one of the biggest expenses for Australians and with financial pressures from COVID-19, you could be feeling under more stress than usual.

For some people refinancing may bring up questions around how to go about it – including whether they may have enough time, or if they might end up in a worse position.

Refinancing can be helpful in many ways. It could help you release equity from your property, or potentially help you save with a lower interest rate. Refinancing may also increase your cashflow if you take advantage of the cashback offers that some lenders are offering.

If you’re uncertain about the impact that COVID-19 could have on your home loan, then it’s a good idea to speak to a home loan expert to help you understand what your options may be.

5. I need to save a huge amount for a deposit

For some Australians, it can be intimidating and deflating to think about the size of a deposit needed to purchase a home. And this could be holding them back from achieving their home buying goals.

Despite all the information around saving 20% of the mortgage amount upfront, there is some government assistance and initiatives available to help home buyers.

This year, the First Home Loan Deposit Scheme (FHLDS) launched, which enables aspiring first home buyers to take out a loan with as little as 5% deposit.

If you’re questioning what government assistance you may be eligible, it’s worthwhile to check in with an Aussie Broker who can help break down the information for you.

View the Covid-19 property impact report

To learn more, download the Covid-19 property impact report.

Connect with an Aussie Broker

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