There is no doubt that the current COVID pandemic continues to impact on all sectors of the economy, with the hopes of the nation now pinned on the success of the continuing vaccination roll-out. The first lockdowns early in 2020 saw thousands of employees without work as temporary business closures became necessary to contain the virus.
Lowered Mortgage Interest Rates Enacted
At first, it appeared that the economy would be severely affected but the Reserve Bank and both levels of government put in place a range of policies to support the domestic economy. These policies affected almost every corner of the economy directly and indirectly, including the property market. For example, the monetary policy enacted lowered mortgage interest rates, which in turn, appears to have played a big role in increasing property prices.
Six Month Deferral on Loan and Mortgage Payments
Other initiatives were put in place to support mortgage holders, whose employment was compromised, including a six-month deferral on loan repayments. The Australian banking industry also advised that borrowers who were granted these deferrals, would not have their credit rating affected as a result of the deferrals, provided they had been up to date with their repayments prior to the pandemic. All of these measures were successful in supporting the economy and for some time, the spread of the virus was limited to specific areas and situations.
Further Assistance Still Available Where Needed
However, there have been on-going lockdowns and border closures in 2021, especially in New South Wales and Victoria. The effects of these lockdowns and closures prompted lenders to again offer some financial relief. There is a range of assistance available for small businesses including loan repayment deferrals, and both business owners and individuals can apply to their lenders for repayment deferrals on their mortgages.
Mortgage Stress Statistics Show Improvement
New research published in July 2021 shows that 17.3% of mortgage holders experienced some level of mortgage stress up to and including the end of May 2021. This is a welcome reduction to the level of mortgage stress experienced in the previous 12 months which sat at 19.4% early in the pandemic. Conversely however, there are still many workers experiencing disruption to their normal working hours and hence their income, and in this group, mortgage stress is 19.9%.
Here at Bunbury Real Estate, we had similar disruption to our business and the lives of our staff and clients in the early stages of the pandemic. However, our state has been able to control the spread of the virus and although our borders are temporarily closed, both the property management and real estate sales sections of our business are still successfully operating.