I believe the overhaul and extension of the JobKeeper program will continue to shore up property markets in the months ahead.
The Federal Government has just announced that the wage subsidy will be extended until March next year.
However, JobKeeper payments will fall from $1500 to $1200 per fortnight after September with part-time employees working fewer than 20 hours a week receiving $750 a fortnight.
From the start of next year, for three months, JobKeeper will reduce to $1000 per fortnight and fall to $650 for people working fewer than 20 hours a week.
With the support now continuing until next year, the influx of distressed listings that some buyers were holding their breath for at the end of September is even more unlikely.
Plus, from a bigger picture perspective, the gradual phasing out of these stimulus packages, including mortgage repayment pauses, will also prevent a sudden economic shock.
The requirement for businesses to reapply for the JobKeeper wage subsidy is also a sound process because it’s vital that more normal economic conditions are able to return sooner rather than later.
It’s great that our economy is strong enough to provide such significant financial support to hundreds of thousands of Australians, which was not the situation in many other countries around the globe.
But it’s crucial for our economic recovery that only businesses that still need support continue to receive it.
Listings to stay low
The extension of JobKeeper is also likely to see listings remain low over the short-term.
The much lower volume of listings on the market since March has helped to underpin property prices during some of the most tumultuous economic times that our nation has experienced.
With JobKeeper now being available until March next year, this is likely to be the situation going forward as well.
With such an undersupply of stock available, many prospective buyers are struggling to secure a property.
This situation means that over recent weeks, we have had more enquiries from buyers keen to take advantage of the networks that buyers’ agents have with sales agents across the country.
These buyers are ready to move forward with their property investment plans that they put on hold earlier this year when the pandemic began, but they haven’t been able to do so because of the low level of listings.
Many Sydney-based investors who have been financially unaffected by the public health emergency are now ready to add to their portfolios with confidence.
A key reason for their optimist mindsets is the risk mitigation that is inherent in our property selection process.
The locations that we advocate for are the ones that have lower risk because they are situated in strong local economics and bolstered by large infrastructure programs that underpin jobs. This is on top of our already rigorous 26 checkpoint selection criteria.
We also only buy free-standing houses or boutique units for clients, which further reduces risk – even when the economy is not firing on all cylinders.
What is most interesting about this rising activity is that it began when our collective common knowledge was that JobKeeper would be wound back at the end of the September.
However, the announcement that it is being extended for a further six months is likely to see more buyers keen to make the most of the current market conditions…. the hardest part will be trying to find a property to purchase without expert help.