As a result of COVID-19, we’ve seen the property market almost grind to a halt. With the economic uncertainty that we’re experiencing, individually, nationally and globally, confidence has fallen and buying, investing and even, in many cases, rental activity has stopped.
For how long, we don’t know.
What will it look like when things return to “normal”? We don’t know.
What we do know is that it must bounce back.
Everybody needs a roof over their head, every builder and developer will have stock they need to sell. There will be people ready to buy that stock. People who already own a home may want to sell their home to upgrade or downsize. People will want to move, buy, sell and invest.
And the government will do everything they can to stimulate the market.
With the cash rate as low as it currently is, there’s not much room for movement to drop interest rates in a bid to stimulate the market. So the government is talking about changes to stamp duty – which is currently a huge hit to the pocket when you’re buying a property. In NSW, on a property valued at $1,000,000, stamp duty is around $40,000.
There’s talk of making it an annual tax rather than a lump sum tax.
This would be great to stimulate activity and would probably assist people to buy property and either hold for a couple of years or buy, renovate and sell without the need to cover the cost of stamp duty before they can turn a profit.
We’re in a definite holding pattern to see exactly what the government will do and how the market will respond. All we can do is speculate, watch and prepare.
If you want to be ready to take action when opportunities arise, please talk to me now so that we can get you ready to apply for finance.
Just like everyone else, we’re all working from home right now, so would love to be able to help you get ready.
Take care and watch this space.