Buyers warned against waiting for the dip

“Notwithstanding the current support packages in place, standard responsible lending practices means that borrowers won’t be metaphorically cast out into the street post-September,” he said. 

“Lenders are required to offer assistance to borrowers suffering from financial hardship any day of any week, even before the generous support currently being offered during the coronavirus crisis.” 

The buyer’s agent explained that it usually meant borrowers could apply for reduced repayments or interest-only loan terms for up to a further year.

This means that in the short-term, as government support subsides, borrowers might struggle for a few months but would still be unlikely to be forced to sell.

“Lenders have been compassionate with borrowers during the crisis, and that is likely to continue given the highly unusual financial circumstances at present,” Mr Ossitt said. 

“Also, there has been some indication that just because borrowers opted for a mortgage repayment pause, it didn’t mean they were financially struggling. 

“Rather, it seems that a significant proportion did so proactively to bolster their cash flow in case they experienced financial stress from the crisis.” 

Experity Capital mortgage broker Nick Graham said lenders were already helping existing borrowers where needed.

“APRA relaxed the serviceability assessments for existing borrowers to more easily allow them to change current loans to interest-only repayments or extending interest-only loan term by up to a year,” Mr Graham said. 

Mr Ossitt said that as borrowers applied for mortgage repayment pauses at different times, it would also prevent listings hitting the market en masse in late September. 

While acknowledging the market could ebb and flow over the next couple of years due to mortgage repayments holidays, it will all depend on location. 

“At the moment, the number of listings and buyers have fallen to the same degree, which has underpinned property prices,” Mr Ossitt said. 

“However, some blue-chip locations, like the Northern Beaches, will continue to be insulated from any meaningful price reductions because of the resilient nature of the market, with strong demand from buyers and a reduction of sellers in these areas.”

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