Property D-Day: The date when thousands of Australians could be forced to sell their homes, causing house prices to drop
- Pandemic lockdown measures have left many Australians unemployed
- Australian banks allowed mortgage payments to be deferred for six months
- Experts warn of ‘cliff’ in September when payments resume and job ends
- Here’s how you can help people affected by Covid-19
Thousands of Australians could soon be forced to market their homes, despite falling property prices amid the corona virus pandemic.
The value of corporate and household loan deferrals has risen $ 250 billion, as thousands of Australians are allowed to stop paying back because unemployment is skyrocketing as a result of lockdown measures.
The massive figure has prompted the Australian Prudential Regulation Authority to warn of a looming cliff in September when the deferment of payments ends and some customers are forced to market their properties because they cannot repay the deferred loans.
The value of deferred loans for businesses and households has reached $ 250 billion as thousands of Australians are allowed to stop paying back during the pandemic (stock image)
Australians who cannot afford to repay their loans when the deferment ends in September may be forced to market their properties (home auction broker, pictured)
Many Australian banks allowed customers to postpone their mortgage payments for six months in April, after the limitations of the closings and border closings forced thousands to quit or get lower salaries.
“We often talk about the cliff, and then everything ends in six months,” APRA chairman Wayne Byres told a senate committee in COVID-19 on Thursday.
Experts have long predicted that house prices may drop across the country due to the health crisis of COVID-19.
Melbourne University economist Dr. James Brugler has expected a decline in many major cities, notably Perth, which may be affected by a 30 percent decline.
He said that most homeowners have only a small amount of loans against their home and can withstand a drop in property prices.
However, some with large loans will be hit hard.
“In Sydney, Melbourne and Brisbane, we calculate that a quarter of households will see a 10 percent drop in equity,” he said. News Corp..
“In Adelaide, the numbers are less strict, but for Perth, a quarter of households are struggling with a 20 percent or more decline in equity. The reason for this is that the real estate market in Perth is more exposed to fluctuations in stock prices and the average household debt exceeds house value.
Experts say real estate investment prices may drop even more if foreign buyers drop out of the market.
Labor Senator Katy Gallagher said on Thursday that she is concerned about the Reserve Bank of Australia’s statement that it may be a mistake to end the JobKeeper scheme in September.
She said part of the economic recovery is consumer confidence to issue – and if loans and JobKeeper are suspended in September, the doubled effect could hurt the economy’s ability to bounce back.
Economic consequences, such as shrinking housing and credit markets, could bring Australia dangerously close to a recession.
“In Sydney, Melbourne and Brisbane, we calculate that a quarter of households will see a 10 percent or more drop in equity,” said an expert