Key point summary
- The market is full of choice, but is much smaller than usual
- Private and off market sales have increased
- Inspections have been banned, resulting in many agents asking for evidence of home loan pre-approval
If you’re saving to buy your first home, the coronavirus may have stamped some big question marks all over your property plans. But if you're still earning a steady income, it's very possible to get a home loan. In fact, you may be in a great position to jump onto the property ladder.
Here are some of the big changes facing first home buyers.
Effect of COVID 19 on the property market
Like most of the country, the property market went into a form of hibernation when COVID-19 social distancing measures were put in place in March. While there are still properties for sale, many sellers withdrew their property campaigns at this time.1
However, we may see volumes bounce back now with the relaxation of social distancing measures encouraging more people to put their house on the market.
On-site auction and inspections
While on-site auctions and open for inspections were banned in March to align with social distancing measures, restrictions have now been relaxed to allow a limit of 10 people at public auctions. As of 1 June 2020, restrictions will be relaxed even further to allow 20 people at auctions and open for inspections with agents required to keep the contact details of those who attend.
This could be a great opportunity for first home buyers to begin their research phase into the current market by attending inspections and auctions in the area they wish to buy and understand the amount of competition from other buyers.
The Federal and Victorian governments, together with the Reserve Bank, have pledged stimulus measures worth more than $300 billion to prop up the economy during and after the coronavirus lockdown. To help owners with mortgages to hold onto their homes, interest rates are being held at record lows and many lenders, including BankVic, are offering payment deferments for those experiencing financial hardship.2
But what about over the next six months, as the economic impacts of COVID-19 become clearer?
Overall Melbourne house prices have remained steady and have not been as impacted by COVID-19 as sales volumes. Sales from the week ending 17 May saw an increase in house prices after an 8-week decline1. The REIV believes the property market may start gaining momentum lost during the pandemic.
As Victoria and Australia begins to revive its economy, it’s hard to say exactly what will happen to employment rates and, as a result, housing prices. However, those who have ongoing employment and are ready to buy may well find themselves in a strong position.
Can I get a home loan?
At BankVic, we’re continuing to approve home loans for buyers with a secure income and a minimum deposit. Our first home buyer package includes highly competitive rates and a generous 85% Loan to Value Ratio (LVR). This means you can get a home loan with only a 15% deposit, without needing to take out Lenders Mortgage Insurance (LMI).
Call one or our first home lending specialists to find out more. We can help you over the phone or via video conference and our mobile lenders can now visit you again in your home at a time that suits you.