Older Australians Hit by Coronavirus Impact on Property Market

The latest announcement of a $1500 wage subsidy per fortnight to eligible employees and businesses could go a long way towards solving tenant and landlord issues during the coronavirus pandemic, says a property industry association.

The latest tranche of financial stimulus, announced Monday, could mean more tenants and landlords meet regular financial obligations, explains Property Investment Professionals of Australia chairman Peter Koulizos, including paying rent and mortgages over the next six months.

Prior to Monday's announcement, Koulizos said many property investors had been worried about covering mortgage repayments if tenants were unable to make rent.

“The subsidy provides much-needed support for businesses and employees significantly financially impacted by the pandemic,” he said.

“Which will ultimately see more people keep the roofs over their heads.”

Older property investors

The latest stimulus package follows Morrison's announcement of a six-month freeze on evictions of tenants, both residential and commercial, unable to pay rent due to Covid-19.

In recent years Australia has seen an increasing trend for older people to retire with an outstanding mortgage, or remain in the private rental market. Covid-19 is likely to compound the problem.

For older Australians, the pandemic has struck hard, particularly for those drawing down superannuation. And as a result, self-funded retirees are likely to feel the kick.

UniSA’s Dr Reza Bradrania said self-funded retirees—those relying on rental income to fund their retirement—were likely to feel the brunt of changes should no rent come in.

“Older investors who have paid off their mortgages and are using rental incomes to live as self-funded retirees are at particular risk right now, as they will not be receiving any of the same supports that old age pensioners will receive,” Bradrania says.

Housing and property researcher, UniSA’s Dr Braam Lowies says there's concern for older home owners amid Covid-19.

“Older people on the brink of retirement represent one of the most vulnerable groups affected by the pandemic – not only due to health reasons, but also because of the future superannuation income losses,” he says.

“These people will find it extremely hard to regain these losses when they retire, and may be forced to work longer, if indeed they still have employment.”

The property market

Koulizos says it’s impossible to forecast the impact of the coronavirus pandemic on the real estate market over the short-term, but providing shelter remains the sector’s number one priority.

“We hope that the situation becomes clearer in coming weeks to help to protect the hundreds of thousands of people employed in the property sector across Australia,” Koulizos said.

Roughly 40 per cent of the nation's auction's were withdrawn over the weekend, with social distancing measures resulting in open homes and auctions banned.

The Real Estate Institute of Australia has encouraged the real estate industry to take advantage of online inspections and auctions, in making better use of technology.

Corelogic says vendors are likely to withdraw their property from the market, or postpone until conditions improve.

Australia's job keeper allowance

The federal government’s job keeper allowance, announced on Monday, aims to help businesses keep employees in jobs.

Eligible employees will receive government support through their employers of $1500 per fortnight under the scheme.

The flat payment scheme is not means-tested against the employee’s regular wage.

To be eligible, businesses will have to show they have suffered a minimum reduction in revenue of 30 per cent.

The ATO has established a site where employers can now lodge an expression of interest.