Leading property investment expert Bushy Martin says it is still a good time to buy and sell property, despite the COVID-19 pandemic. But the window of opportunity could shut soon.
The investor, author and founder of KnowHow Property Finance said the Australian property market has so far remained stable through the coronavirus crisis.
“I say ‘yes’, it is a good time to buy and sell, but not for the reasons that you might expect,” Mr Martin said.
“Property values are really being held up by a drastic drop in supply. We’re actually seeing a number of clients who are in a position to be able to buy property, but they’re not being able to get their hands on them because very few properties are actually listed for sale.
“The number of property listings, or properties that are actually on the market, has dropped by well over 50 percent, which is a massive fall across the country. And that means that there’s a limited number of sellers, but still a large number of interested buyers. So in the dynamics of supply and demand, right here right now, we’re actually still in a situation where we’ve got excess demand.”
The property market is expected to remain this way for at least the next six months.
“We’ve got the loan repayment holidays, we’ve got a whole heap of additional money coming in to the system to support us a safety net for at least that six month period so that’s really going to put the property market into hibernation,” Mr Martin said.
“There may be some very small drops in values and that will depend on the quality of the property. So I wouldn’t be buying apartments. I wouldn’t be buying units. Because long term they’re not going to perform.”
But Bushy warned those considering buying or selling to move quickly, because an imminent shift from the banks could make things more difficult.
“A key thing I am looking at is how the banks are performing and what their lending appetite is going to be,” Mr Martin said.
“Property is a game of finance and it’s the flow of credit that ultimately is going to determine the amount of demand that’s out there.
“And what we are seeing at the moment is the banks are tightening the screws in terms of who they’ll lend to and how much they lend to you, by pulling back on some of the lending policies. So they’re temporarily suspending any lending to people in certain industry sectors that are affected by the pandemic. But they’re also cutting back on income allowances, which will ultimately reduce the amount we can borrow, which will have a potential flow on effect in relation to how much you can pay for a property.
“I would be looking at getting in to the market before any bank credit squeeze starts to make it difficult for you to borrow money, and the bank valuations may also start to reflect what’s happening with the pandemic too. So the perfect window to get active is going to be somewhere between now and the next few months.”
Despite global uncertainty, Mr Martin said Australian property remains a safe, long-term investment .
“The fundamentals of Australian property are very strong,” he said.
“The reality is that we’ve got historically low interest rates. Money has never been cheaper and it’s not likely to change any time soon, at least for the next three years. That’s all supported by very strong demand, and we’ve still got a very significant housing shortage across the country.
“So if we can stay calm, rational and avoid fear, there are still great opportunities to buy, invest and get set up for the long term.”
About KnowHow Property Finance:
KnowHow Property Finance helps hardworking time-poor professionals build wealth safely and affordably to improve their lifestyle through a unique integration of strategy, finance and national property facilitation solutions. To date KnowHow has helped more than 1700 investors secure in excess of $700M in property. KnowHow has over $300M in loans under management and their money management systems have saved clients in excess of $10M.
Founder Bushy Martin is recognised as one of Australia’s Top 10 Property Specialists and Property Finance Mentor of the Year, and is the author of award-winning books The Freedom Formula and Get Invested along with his popular Get Invested podcast. Bushy manages his own growing international property portfolio, and holds a range of qualifications including MBA, Architecture, Project Management, Real Estate and Finance Broking. KnowHow’s mission is to inspire hardworking Aussies to become ‘passive aggressive’ savers and investors to secure their families future.
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