More than 6 in 10 Aussies with property goals have changed their plans in the wake of COVID-19, according to a new survey.
Research commissioned by mortgage broker Aussie Home Loans has found that COVID-19 has dampened the hopes of many people in the property market, despite the 'perfect storm' of opportunities whipped up by the pandemic.
The mortgage broking house surveyed nearly 2,800 Aussies in June 2020.
Of those, close to 1,900 had housing plans to achieve within five years, such as buying a new home or downsizing.
But two thirds of respondents with plans said the pandemic has made them uncertain about reaching their property goals.
More than half said they feel "nervous" about investing in property, with 70% saying job security and saving money are more challenging now.
Over a third are also saying they are focusing more on building their savings than they were prior to the pandemic.
Buying a home or looking to refinance? The table below features home loans with some of the lowest variable interest rates on the market for owner occupiers.
Smart Booster Home Loan
- Discount variable for 1 year <=80% LVR
- No ongoing fees
- Unlimited redraw facility
Monthly repayments: $1,476
- Discount variable for 1 year
- No ongoing fees
- Unlimited redraw facility
Base criteria of: a $400,000 loan amount, variable, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. If products listed have an LVR <80%, they will be clearly identified in the product name along with the specific LVR. The product and rate must be clearly published on the Product Provider’s web site. Monthly repayments were calculated based on the selected products’ advertised rates, applied to a $400,000 loan with a 30-year loan term.
Aussie's chief customer officer David Smith said the extent to which the crisis was unsettling Australians could lead to 'missed opportunities' in the property market.
“In a market which sees property prices across Australia’s capital cities continuing to fall, interest rates remaining the lowest on record, a range of refinancing options, access to lender cashback incentives, and a range of government initiatives and grants available, there are many opportunities for both first home buyers and homeowners to secure their goals," he said.
First home buyers under the pump
Coinciding with Aussie's survey findings, Gateway Bank has revealed 68% of first home buyers have been forced to put their plans on hold during the pandemic.
Gateway's survey also found half of first home buyers have tapped into their deposit during the pandemic, with 80% also reporting they will need to save for an additional year to get their deposit.
Forty five per cent directed their withdrawn funds to day-to-day expenses, while 36% put it towards an emergency fund.
Just over one in ten re-directed their deposit money to sharemarket investments.
Despite the pandemic's hit to first home buyers' savings, Gateway's CEO Lexi Airey said the "dream of home ownership remains alive".
"Some first home buyers are taking advantage of Government Schemes in a bid to circumnavigate the need for a 20% deposit," Ms Airey said.
However, the survey also indicated more than one in five first home buyers were unaware of any available government schemes.
Ms Airey pointed towards various initiatives such as the first home owners' grant (FHOG), the first home loan deposit scheme (FHLDS), the first home super saver scheme (FHSSS), and stamp duty concessions.
“These schemes and other options such as lenders mortgage insurance or a family guarantee are designed to help first home buyers purchase their property sooner," she said.
"Awareness of these measures is generally quite low, and those looking to enter the property market for the first time could be missing out on an opportunity to put their pre-COVID home ownership plans back on track."
Need somewhere to store cash and earn interest? The table below features introductory savings accounts with some of the highest interest rates on the market.
The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:
- The big four banks are: ANZ, CBA, NAB and Westpac
- The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2020. They are (in descending order): Credit Union Australia, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
- The larger non-bank lenders are those who (in 2020) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.
Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site.
In the interests of full disclosure, Savings.com.au, Performance Drive and Loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.
*Comparison rate is based on a loan of $150,000 over a term of 25 years. Please note the comparison rate only applies to the examples given. Different loan amounts and terms will result in different comparison rates. Costs such as redraw fees and costs savings, such as fee waivers, are not included in the comparison rate but may inﬂuence the cost of the loan.
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