Should I Buy or Sell During COVID?
“These are unprecedented times” – a phrase you have no doubt heard on countless occasions within the last few months. COVID-19 has brought a level of uncertainty that none of us have ever quite seen before in our lifetimes. For many everyday Australians, this has developed into somewhat of a black cloud hanging over our finances, particularly whether it is the right time – or not – to attempt buying or selling a house.
There is one recurring question being asked from all corners of the housing market – “should I buy or sell during Covid-19?” It’s a theme connecting everyone from potential first home buyers, owners of investment properties, and unfortunately even those looking to offload assets to compensate for a restriction in cash flow during the time of the coronavirus.
Ignoring all of the variables, there is one paramount item to remember when you’re thinking about property in any form – it’s a long game. Think in 10 to 20 year allocations, not shorter 1 to 2 year terms. Having a long term plan and foresight is important. Will you have the same requirements or needs in a decade, as you do now? While a Brisbane CBD view and close access to the local nightlife scene might be a priority for you at 28, have you considered the schooling options that you may potentially need at 38?
An example of the long game is Cooparoo, just four kilometres from Brisbane CBD. With the median price of a three bedroom house now sitting at $790, 000 in April 2020, only nine years ago in 2011 the average was $630, 000. According to RealEstate.com – in under a decade, it has seen a 25% increase. What will Cooparoo be averaging in another decade?
Madd Loans founder George Samios shares his own experiences in the early days of his foray into the housing market.
“When I was 20, I bought a property in Kangaroo Point. I paid $515, 000 in 2010 for a three bedroom, two bathroom, split level apartment with Brisbane City views. I kept that property for eight years during a beautiful housing growth period in Queensland between 2010-2018 – however, my apartment never saw that growth and I ended up losing $70, 000 once I sold it.
The reason I sold it was that I started seeing more of my other customers buying property like houses – house and land – and close to the CBD within the 10km radius. Those properties kept going up and up, and my apartment kept going down. When I bought that first apartment, I didn’t think about George in ten years’ time married with kids, I was thinking of George in his young 20’s doing things that he enjoyed. This is a classic example of why I now think that it’s incredibly important for a first home buyer to think ahead. Property is a long term plan, and that’s how you make money from it.”
But what about selling or refinancing?
Thanks to historically low interest rates never seen before in Australia, we are yet to see a significant hit to the property market within Brisbane. This has kept the buyers consistent, along with a healthy and competitive market to consider refinancing existing loans.
Should you find yourself selling, if you hold onto your money you risk buying in an entirely different market – it will either be cheaper, or more expensive. The swing could be significant in either direction, but both are generally outside of your control. There is arguably a lower risk when selling and buying within the same market period, even during a time that involves living with COVID-19.
For a free assessment on what you could potentially afford in line with your financial position or to consider refinancing options, please contact us to start considering your options.