This country is a farce.
Imagine borrowing hundreds of thousands to lose money, gamble on capital gains, while having no margin of error to deal with a lack of income, then expecting the government to bail you out.
When dividends get cut I'm guessing investors won't get a government bailout, despite the government shutting the country down.
Property investors want their own version of JobKeeper coronavirus stimulusResidential property investors are heading into very choppy waters as early moves by the government to soften a looming rental crisis across the sector offered details on protecting tenants without reference to parallel proposals for property owners.
Auction clearance rates are falling fast while the practical difficulties of selling or renting property has become more difficult with the ongoing lockdown.
At the heart of property investor concerns is the prospect of no rental income for up to half a year after the federal government announced there would be a moratorium for six months on tenant evictions where there is “financial distress relating to coronavirus”.
Damian Collins, the president of Western Australia’s REIWA said: “We are pleased the policy direction appears to be specifically targeted at those significantly affected and I expect we have only heard half of the plan. We need to hear the full details very soon and we need clear definitions on what these terms such as ‘financial distress’ actually imply.”
A swag of proposals to alleviate stress on property investors are said to be on the table among state governments, but property representatives want the property sector to have its own version of the $138bn wage support JobKeeper package announced on Monday where employers receive job assistance payments directly from the government.
“We want to see the managing agent or landlord of the property directly receive assistance payments to see through the crisis,” said Collins of the REIWA.
Antonia Mercorella, CEO of Queensland’s REIQ, said: “For property owners, it’s not just a matter of pressing pause on mortgage repayments to set and forget for six months.
Risk of bankruptcy
“Many mum and dad investors can barely cover the various costs associated with owning an investment property even with rent coming in - so they may not have any other choice but to sell their properties.
“It puts many at risk of bankruptcy. Consideration also needs to be given to those self-funded retirees whose only source of income is derived from an investment property.
“It is very difficult for all parties concerned when we are working without clarity here. Though one thing that is becoming clear to property investors is that landlord insurance is going to be irrelevant in most cases,” Mercorella added.
There are more than one million investment property owners in Australia and representatives groups have been sceptical about any plans to encourage interest only loans or tax incentives similar to those applied in the commercial property industry.
“We don’t think pushing the problem down the road will help at all,” said Collins at REIWA.
Property industry research houses are reluctant to quantify how the crisis might hit nationwide property prices as transaction activity dwindles in the months ahead.
However, US investment bank Morgan Stanley has publicly raised the prospect that price falls could be 10 per cent plus.
“The declines seen over 2017-2019 could easily be tested and the scheduled ending of interest holiday and support packages in six months’ time could be a key period when they start to emerge. While the moves may be more gradual than others assets, we still expect the impact will be substantial,” said the broker.
According to Morgan Stanley: “Looking forward, the coming months are likely to see substantially fewer auctions than normal. Some vendors will choose to convert their listing to a private treaty method, while others will likely pull their property from the market all together until confidence and selling conditions improve.”
https://www.theaustralian.com.au/bu...s/news-story/f385000f3e82db761f95599cdb2eb385
