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Should I buy or sell a house during the COVID-19 pandemic?

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The question on many people’s lips right now is: “should I buy/sell a house during this pandemic”?

As the country continues to grapple with the economic hit from the virus, we’re facing uncertain (some would even say unprecedented!) times, so it’s understandable that many would-be buyers are hesitant to purchase property in this environment.

It’s human nature to find it difficult to buy your new home or invest when everyone else is thinking the world is coming to an end.

Others argue though, that right now is exactly when you should buy - in line with the old saying, “be fearful when others are greedy and be greedy when others are fearful.”

It is exactly these conditions that often present the best opportunity. That means now may be the time to get prepared to take advantage of the opportunities that the market will offer.

Where is the property market going?

By now, we’ve all heard the property price forecasts. Most economists are predicting falls of anywhere between 10% and 20%, while some are forecasting a 30% drop in values in a worst-case scenario.

Our biggest housing markets: Sydney and Melbourne are expected to bear the brunt of the downturn because they rely heavily on overseas migration, which has been temporarily halted thanks to coronavirus lockdowns.

The first signs of a slowdown in house prices are already here, with some of the steam coming out of the Sydney and Melbourne markets in April according to figures from CoreLogic.

Change in dwelling values to April 30, 2020




Median Value

































Combined capitals




Combined regional








Source: CoreLogic

Rents have been falling and the economy remains weak, both of which are likely to translate into lower house prices.

What is the experience of previous crises?

Australia hasn’t been in a recession since the early 1990s but prices actually rose in many places during the worst months of the recession according to Australian Bureau of Statistics (ABS) data.

This can partly be explained by interest rates - at the beginning of 1990, the official RBA cash rate was 17.50% - a figure that seems unbelievable today - before steadily falling over the following years. At the time, the major banks had been focused on commercial and business loans but quickly moved into the home lending space as business loans dried up. This availability of easy credit is what sustained the property market during the 90’s recession.

Fast forward to the global financial crisis (GFC) and, while Australia famously avoided a recession, data from the Australian Bureau of Statistics shows us that property prices fell during this time and recovered as interest rates fell.

History shows us that after most major economic crises, house prices tend to rise so buyers who purchase during the COVID-19 economic crisis have a rare opportunity to buy towards the bottom of the market.

For those who have a secure job and their finances organised, this could be a great time to buy a home or investment property at a price that you were unlikely to get a few months ago when the property markets in big capital cities were booming and there were more buyers around than sellers.

There is no doubt there will be opportunities in the market for those who are willing to go against the crowd and when they look back in a year’s time and definitely in five or 10 years’ time, they will remember the unprecedented events of 2020 as a great buying opportunity for property.

How can I finance a purchase now?

While the financial impact of COVID-19 has made it harder for workers in directly affected industries like tourism and hospitality to get a loan, for many people it remains quite viable to borrow to buy a property.

If you are considering buying, check with your employer to confirm your employment stability as this will have a big impact on your prospects of getting an approval. You can ask your employer to write a letter confirming your income and employment stability.

The good news is that with interest rates at record lows, you may be able to secure a home loan at a historically-low rate!

At loans.com.au it is business as usual so talk to one of our loan specialists today to get started or visit our home loans page for more information.

About the article

As Australia's leading online lender, loans.com.au has been helping people into their dream homes and cars for more than 10 years. Our content is written and reviewed by experienced financial experts. The information we provide is general in nature and does not take into account your personal objectives or needs. If you'd like to chat to one of our lending specialists about a home or car loan, contact us on Live Chat or by calling 13 10 90.

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