It’s often said that real estate is one of the safest investments you could make.
But with property prices falling for the last two months, some experts are saying now isn’t the right time to snap up a new home.
According to a recent survey by Finder, only 35 per cent of property experts think now is the time to buy a property.
AMP Capital chief economist Shane Oliver said home prices were predicted to fall across the rest of the year and into 2021 due to several “ongoing weak economic conditions”.
“Further weakness is likely ahead. The experience in Victoria and globally indicates that coronavirus is still far from being under control,” he told Yahoo Finance.
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And the economy will spiral further if the outbreak continues to spread, he added.
“More importantly we are yet to see the full impact from high unemployment (which will likely worsen later this year as JobKeeper is withdrawn), the plunge in immigration which is reducing underlying housing demand by around 80,000 dwellings a year, and the weak rental market.
“The combination of all this particularly as the bank payment holiday ends is likely to drive up forced property sales and lead to reduced demand all of which will push prices lower.”
Australian borrowers will be relieved to know that major banks and lenders are offering extensions on repayment holidays by four months, should they need the extra time, though returning to full loan repayments is encouraged.
“Those who are able to repay their loans will resume doing so, which is in the best interests of those customers and allows support to be directed to those who need it,” said Australian Banking Association CEO Anna Bligh.
Meanwhile, realestate.com.au chief economist Nerida Conisbee told Yahoo Finance whether or not now was the time to buy property depends on the individual situation.
“First home buyers are particularly active with high levels of enquiry. Contrasting that, investor activity remains low,” she said.
“Buying and selling in the same market and buying to hold onto property for a long period of time is always best, especially when the market is uncertain. Property search on realestate.com.au has been steadily rising since the start of April and we are continuing to see high demand.”
Why now is a ‘great time’
However, hotspotting.com.au managing director Terry Ryder said Australia should not be treated as a single market, and that Sydney and Melbourne’s property market should not be taken as the norm for property markets nationally.
“I think it's a great time to buy real estate in many locations around Australia, particularly regional centres and the smaller capital cities. There are some parts of Sydney and some parts of Melbourne I would avoid, but in most locations it's a good time to be looking - and especially for first-home buyers,” he said.
“For first home buyers,, there's never been a better time to be in the market.”
Metropole Property Strategists CEO Michael Yardney also said “any time” could be either the worst time or the best time for you to buy property.
“It really depends on your own goals, budget, timeline, risk profile and circumstances as to whether 2020 is a good time to buy,” he told Yahoo Finance.
“If you've just lost your job or your income is insecure in the current economic climate, then yes, this could be a risky time to commit to a mortgage; in fact, you’d struggle to get a loan.
“However if you're financially stable and have a deposit ready to go, then some might argue that with 2 per cent mortgage rates and opportunities to negotiate strongly, 2020 could be the property buying opportunity of a lifetime.”
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