- Posted By Craig Wieckhorst
RECESSION, SPRING & COVID-19
“What is a recession? And how will this affect me and buying a property?”
What is a recession?
The definition of a "recession" is two consecutive quarters of negative GDP (Gross Domestic Product) growth. In other words, the economy hasn’t expanded from January through March quarter.
Even if you don’t know what the impacts of recession will be, the word alone already makes us unsure.
How will this affect me & buying a property? Welcome Spring with Recession!
At times, buying during a recession can work in your favour as house prices may not be on the incline. During this time, Vendors are a bit more motivated to sell and are open for negotiations.
Although there is NO better time to welcome a recession, the timing may be an advantage for those looking to buy. Spring time has always been the best SEASON to showcase property to sell. With the wide range of properties being listed, you will have a better chance of finding exactly what you want.
To Top This UP! The HALF of Mortgage Deferral’s will be reviewed in the coming weeks.
As per the ABA (Australian Banking Association), At least 450,000 of the 900,000 loans on six-month mortgage deferral are due to expire in the coming weeks. Lenders will be contacting deferral customers to determine if further assistance is required due to COVID-19. This will also be a time for mortgage holders to consider Selling their property if the burden is too much.
So now we have- Recession, Spring & Covid-19 Mortgage deferrals which should produce more supply than demand on the market. This could possibly, force MOTIVATED sellers to accept an offer lower than what they’re asking.
Given all that, before you buy: Be honest about your finances.
Just because you might be able to “Snap a Bargain” during this period it’s not always a good idea to take it, the big question to ask yourself is “How Much Can I Really AFFORD?”
Recession doesn’t just affect homeowners – Job instability can turn a bargain home purchase into a financial Hardship.
Before you make a move, ALWAYS speak to your Broker/Lender. 😊