How will the property market cope when JobKeeper, home loan repayment deferrals and eviction moratoriums end?

author-avatar By on June 16, 2020
How will the property market cope when JobKeeper, home loan repayment deferrals and eviction moratoriums end?

Photo by Pat Whelen on Unsplash

Support for those experiencing financial hardship has helped millions of Australians through the COVID-19 recession, but what happens when this support comes to an end?

Tenants and landlords have both been hit hard financially by the pandemic.

Many tenants have lost their income and have been unable to pay their rent, which has had a knock-on effect on the rental income of landlords, many of whom are mum and dad investors.

Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.

Advertised rate Comparison rate Monthly repayment Rate TypeOffsetRedrawOngoing FeeUpfront FeesLVRLump Sum RepaymentAdditional RepaymentsPre-approval

VariableMore details

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
VariableMore details

Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)

  • Unlimited additional repayments
  • Unlimited free redraws
  • Optional 100% offset can be added for $120 p.a.^

Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)

  • Unlimited additional repayments
  • Unlimited free redraws
  • Optional 100% offset can be added for $120 p.a.^
FixedMore details

Basic Home Loan Fixed (Principal and Interest) (LVR < 70%) 3 Years


Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. Rates correct as of October 26, 2021. View disclaimer.

Lenders, and Federal and State Governments have come to the rescue in a big way.

The Australian Banking Association (ABA) announced at the start of March that lenders would offer deferrals of loan repayments, as well as waiving fees and charges.

As of June 7, almost 500,000 mortgage repayments worth a total $172 billion have been deferred.

At the end of March. Prime Minister Scott Morrison announced a six-month moratorium on residential and commercial evictions.

This was enforced by the states, with each offering varying degrees of financial support in the form of rent deferrals, rent waivers, and one-off payments to landlords and tenants.

Arguably the most important support measures, JobKeeper and JobSeeker, were also announced in March.

It’s thought JobKeeper stopped Australia’s unemployment from rising above 15% and prevented a depression.

You may have noticed each of these support measures began in March, and with each running for six months, means they all end in September.

JobKeeper has a 27 September end date, but this could occur even sooner, with the Government refusing to deny an early end and already rolling back support for childcare workers.

How will the property market cope when these support measures end?

Australian Housing and Urban Research Institute (AHURI) Executive Director Michael Fotheringham told rent deferrals were a complex and problematic issue.

“Particularly for tenants, who are not on a full 12-month lease or longer. The vast majority of tenants are on shorter leases,” Dr Fotheringham said.

“So their repayment plans will be tricky, depending on what's been negotiated, and these are all individual negotiations without a huge amount of oversight.

“The deferral payments might be quite problematic and there may be a huge spike in eviction notices or bankruptcies and that's potentially huge.

“The moratorium on evictions to that point also lapses so that protection falls away.”

Dr Fotheringham said there was a huge risk of rental vacancies and home loan arrears spiking.

“I think that there will be households who have to move out of their rental accommodation because they can't manage the full payments, let alone deferred payments on top of full payments, and who therefore have to leave tenancies.

“That could lead to increased vacancies, it might also lead to reduced rents across the board as those vacancies spike and people aren't able to afford the rent they previously were.”

But SQM Research property analyst Louis Christopher said the worst of the damage to the rental market had already been done.

“A rise in rental vacancies is possible, but keep in mind the rental market's already taken a rather big hit to begin with, Mr Christopher told

“Rental vacancies are already up, I don’t think they would spike that much further over and above because of the ending of these measures.

“Potentially you would see some tenants being forced to leave but I think overall we've seen the bulk of the pain already occurring in the rental market.”

Real Estate Institute of Queensland (REIQ) Chief Executive Antonia Mercorella told rental deferrals ending presented the biggest challenge of all of the support measures.

“What we do expect to see is where rent reductions have been negotiated, and then it's time to pay back that unpaid portion of the rent, that's going to be the challenge if you're required to then pay that back by a certain date,” Ms Mercorella said.

“That's where potentially some of the risks lies, if a tenant that's negotiated a rent reduction on account of losing my job, for instance, and then a certain date rolls around post 30 September that I'm required to pay back the unpaid portion of my rent if I'm still unemployed at that stage and obviously the various sort of grants and financial assistance is not there.

“Then that might be where we start to see some challenges and we might see some tenants defaulting on those loan repayments.”

But Ms Mercorella said she was feeling optimistic on how the property market would fare down the track.

“What's relevant to note is that really only a fairly small proportion of residential tenancies have been impacted by these laws,” she said.

“We guesstimate it's under 10% because of course, in order to qualify for those COVID protections, there are eligibility tests that need to be met.

“So it's only actually a small proportion of tenants who have even asked for a rent reduction.”

Should the financial support be extended?

Mr Christopher said if all of the support measures were to end in September, the property market would see a massive downturn,

“My view is that what the government will likely do is phase them [support measures] out,” he said.

“So it's unlikely we'll see everything end in September with not any offset at all, that would create a major correction in the housing market if they did that, combined with the banks effectively giving a moratorium on their borrowers who cannot meet their monthly mortgage repayments.

“So if all that was to end in September, all at once, we would have a significant correction in the housing market.”

Dr Fotheringham said a gradual or needs-based reduction to support measures needed to be considered, rather than a hard end.

“I think tapering off of some of these would make more sense than everything stopping at the same time,” he said.

“The supports stopping is predicated on an assumption that the economy has returned to pre COVID norms. That's unlikely to be completely true.

“So some sort of graduated program that recognises where employment's at, where the economy more broadly is at, would make sense.”

Ms Mercorella said she wasn’t sure a blanket extension to any support measures was appropriate, but ultimately nobody wanted to see anybody end up homeless.

“What is a more appropriate response is something that is bit more proportionate, a bit more considered, that centres on working out who's who, making sure that no one is getting left behind,” she said.

“If there are people post COVID who haven't been able to find employment, haven't been able to get back on their feet and suddenly do have these arrears that have accumulated, that needs to be considered on, I won't say a case by case basis, but perhaps a new eligibility test needs to be developed to ensure the most vulnerable amongst us are actually still being protected.”


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): Great Southern Bank, 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.
  • If you click on a product link and you are referred to a Product or Service Provider’s web page, it is highly likely that a commercial relationship exists between that Product or Service Provider and

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,, Performance Drive and are part of the Firstmac Group. To read about how 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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Alex joined as a finance journalist in 2019. He enjoys covering in-depth economical releases and breaking down how they might affect the everyday punter. He is passionate about providing Australians with the information and tools needed to make them financially stable for their futures.


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