Your Property Your Wealth director and buyer’s agent Daniel Walsh said the announcement by Australian banks that they would offer customers a new phase of COVID-19 support is further proof that the September “property market crash” – predicted by many in the market – was always unlikely.
The Australian Banking Association (ABA) and the major banks recently confirmed that they would extend mortgage repayment deferrals by another four months for customers who require it. The announcement followed discussions with APRA and ASIC to provide the appropriate regulatory treatment, while the ACCC granted interim authorisation.
Many of the bank customers who had deferred their repayments have already begun repaying their loans following the initial three-month pause, while others will look to do the same at the end of their six-month deferral period.
But according to Mr Walsh, buyer demand had already been steadily rising before the banks announced the new round of support, adding that banks have a duty to assist borrowers facing genuine financial hardship.
He suggested that savvy buyers and investors had remained more active in the housing market over the past two months because they “recognised that lenders were never going to simply walk away from borrowers come September”.
Looking forward, Mr Walsh said he does not expect the housing market to decline at the start of 2021, suggesting that the four-month extension would not have the effect of simply postponing any potential housing market decline to the start of 2021.
He noted that property markets had been strengthening since May, with price discounts unavailable in many locations as well.
“When the coronavirus first hit, buyers were able to get discounts on properties because of poor consumer sentiment and concerns about the economy generally,” Mr Walsh said.
“In some locations, not only are those discounts now gone, there is strong competition for listings, which is pushing prices higher. This is especially the case in locations like Brisbane that aren’t dependent on international migration and were already the beneficiary of strong interstate migration.”
He said property prices are predicted to continue to rise in Brisbane due to the rise in interstate migration, as more Australians from the southern parts of the country prioritise lifestyle and affordability post-COVID-19.
Meanwhile, Sydney and Melbourne-based investors have been capitalising on the equity of their homes or their portfolios, as well as low interest rates to strategically purchase properties.
“The low point of the market was actually about eight to 12 weeks ago, but that opportunity is gone now, with many locations recording prices about 10 per cent higher from trough to peak,” Mr Walsh concluded.
According to Mr Walsh, Your Property Your Wealth has had a 40 per cent increase in clients over the past three months compared to the previous six month average.
Malavika Santhebennur is the features editor on the mortgages titles at Momentum Media.
Before joining the team in 2019, Malavika held roles with Money Management and Benchmark Media. She has been writing about financial services for the past six years.