Real estate agents and mortgage brokers are being advised not to fear the “September cliff”, as business can still be transacted without government support.
The September cliff could see house prices plummet as JobSeeker payments are halved, JobKeeper payments are removed and banking deferral of loans are ended.
During a recent recording of What’s Making Headlines, host Tom Panos explained why real estate professionals should not be fearful of the September cliff.
“We’re only eight weeks away from September, and I want to see what actually transpires, and either way, I’ve got to tell you, if you are right now a mortgage broker, you should be happy. If you’re a real estate agent, you should be happy, because guess what? There’s a market for you, whether the market’s good, whether the market’s bad,” Mr Panos said.
The property guru highlighted that regardless of which way the market goes, consumers will still look at property due to it being more than just an asset to investors.
“People generally are transacting in real estate, not because houses have gone up 5 per cent and they’re going to take that 5 per cent off the table, they don’t think like share investors,” Mr Panos said.
Co-host Phil Tarrant highlighted how economists are seeing the market, with both still helping real estate agents.
“There are two likely scenarios that happen by the end of the calendar year. The first being modest price falls and the second being a slow pick-up in property sales. So, these are the two dynamics that are happening right now,” Mr Tarrant explained.
Mr Tarrant also pointed out how real estate agents in different areas will face different scenarios.
Some areas will rebound faster than others when it comes to prices, and he pointed to Perth, Adelaide and Canberra. Very, if any, COVID cases, and hasn’t been hit as hard economically. When you think of the resources sector in WA, which is connected to Perth, strong demand still from China, Canberra has fared pretty well during this situation.
“So this cliff that everyone, or some people, are talking about, I think you may see impact in some markets but not all markets, and again it comes down to how good you know your markets to know where and where not you should be doing anything,” Mr Tarrant explained.
The banking sector has also committed its support to consumers to stop the September cliff.
Australia’s banks will now extend loan deferrals for another four months for customers who have been impacted by the COVID-19 pandemic, as creditors try to avoid the September cliff.
The extension follows an initial six-month deferral period, which will be judged on a case-by-case basis, with the banks expecting those who are able to resume repayment to start in September.
The additional deferral will also have no impact on a customer’s credit report or their credit rating.
Australian Banking Association chief executive Anna Bligh said over 800,000 people had now deferred over $260 billion worth of loans since repayment holidays were rolled out back in March.
“This next phase of bank support will avoid a ‘cliff’ for customers in September and give them the breathing space they need to work with their bank and get back on their feet financially,” Ms Bligh said.