April 15, 2020 5min read
Given the current climate it’s no wonder many people suddenly feel apprehensive about a prospective, or recent, home purchase. While there are undoubtedly still hurdles left to conquer, a high level of support at industry, state and federal levels has seen the construction sector stand strong during this period.
One of the most googled phrases since the outbreak, ‘How will the coronavirus affect the property market’ is a question that is clearly of large concern to Australians. While there cannot be any certainty at this point in time, many major news outlets have cited their predictions that whatever blow the market takes, it will rebound stronger than ever come 2021.
COVID-19 has created a rare investment opportunity in the sense that across the market, almost all assets have fallen in price, which includes property. So, what do we know for the moment?
Interest rates are at an all-time low
Recently, The Reserve Bank made a move to cut interest rates in a bid to stabilise the economy. What does this mean? Well, as the organisation that sets the official cash rate for Australia, this can have a big effect on your home loan and savings account interest rates. The main benefit of this change is the fact that variable mortgage interest rates have gone down, which equals cheaper repayments. Some good news for current homeowners.
Following this change, some of Australia’s leading banks are now offering lower loan rates to their customers. As an example, ANZ lowered variable home loan rates by 15 points, and was the only big bank to also move toward lowering fixed rates. Borrowers from both ANZ and NAB can now request a deferral of their mortgage for up to 6 months, while Westpac are offering an initial 3 month deferral for anyone whose job has been impacted by the virus. In addition, there are also various promotions hitting the market, and banks and builders are advertising unprecedented offers that we would never see otherwise.
So what does this mean for first home buyers or investors?
Without any intention of being misleading, the swift cut to interest rates was an attempt to soften COVID-19’s impact on the economy as a whole, as many people unfortunately lose access to work or deal with a reduced income. While there are undoubtedly many industries that are suffering during this time, by looking out the other side to 2021, there’s a strong possibility that an investment in property now could see you beat the purchase-rush once normality returns.
If you haven’t considered a Porter Davis 10/90 or 5/95 before…
Typical off-the-plan purchases can prove daunting, as generally the land and construction needs to be paid separately, which means both loans need to be paid concurrently.
Porter Davis’ off-the-plan townhouses are different and a much more simplified process. Our 5/95 and 10/90 contract structure means you only need one loan. Even better, by packaging up construction and land costs with our developer partner, we only require a 5% or 10% deposit until the completion of the build. That’s it!
The perfect opportunity at this pivotal point in the market, you can sleep easy knowing that beyond your deposit you are required to make $0 in repayments until your new home is ready to move into which, as an indicator, could be anywhere from 12-18 months.
What else are we doing during this time to support purchasers?
Increased digital presence
Porter Davis has long been the frontrunner in digital innovations, and over the past 12 months we’ve certainly ramped up our online capabilities.
Due to their ‘off-the-plan’ nature, we have long relied on digital to give our customers the best possible insight into the look and feel of their brand new townhomes. As always, we have easily accessible brochures, renders and floorplans — all at the click of a button. Our highly praised Medium Density portal is still available for customers to view construction updates, and our increasing focus on virtual walk-throughs mean you can undertake an ‘open for inspection’ from the comfort of your couch!
Without a doubt, Porter Davis are Australia’s most digitally advanced major home builder, allowing us to service you well in these challenging times.