It is a question currently on every homeowners mind – how is COVID impacting the equity in my home? Unfortunately, the pandemic has caused the real estate market to decline and it is very likely you have lost value in your home. There is more to the story though and it’s definitely not all doom and gloom.
The real estate market has definitely been impacted since the pandemic began although it has been relatively minor so far. The market has dropped approximately 5% caused by factors including
There is also a shortage of properties for sale in the overall real estate market. Although the Blue Mountains is defying this trend with a good volume of properties still selling and coming onto the market.
The big risk to the real estate market is distressed sales where homeowners sell their property at a reduced price. Distressed sales are typically caused by people losing their income and not being able to service their loan or needing to come up with funds quickly for example to prop up their business. If this occurs, asset prices will plummet.
The current impacts to the real estate market are relatively minor and are not fundamental problems like distressed sales. We are unlikely to see distressed sales for another 6 months or more as the economy is artificially propped up by the stimulus measures and loan deferrals. We are likely to see distressed sales during the period once these measures end and the economy needs to stand on it’s own feet again.
It is impossible to determine exactly how bad this will be though and the severity will depend on factors including
You can substantially reduce or even entirely mitigate any risk and losses by playing your cards correctly. If you own property, it is critical that you know your position and watch what the market is doing. How you limit your losses ultimately depends on your specific circumstances. However here are the key strategies we have recently been giving our clients
Are you wondering how to actually work out what your home is worth? What about how to make sure you’re not losing $10,000’s? We suggest organising a Market Appraisal with a quality local real estate agent so you can have all these questions answered and more. AVVED is currently running an offer where anyone who gets a market appraisal receives a FREE Family Holiday valued at $1400. Click here to find out more on this offer.
We offer Market Appraisals as a complimentary service and provide the following
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