A Note From Our Director in Relation to Mortgage Broking & COVID-19 Outbreak

In light of the Coronavirus pandemic, life has been interrupted throughout both the personal and the business sectors of all Australians.

The Australian National Cabinet has enforced further restrictions on non-essential meetings to two people as of March 29, 2020. Realtors throughout Australia have been adopting limits on public gatherings for coronavirus (COVID-19) by having guided, virtual open houses using sophisticated online technology.

Although realtors are hampered severely by these rules, most Australians, including those involved in real estate and real estate finance, fully back the government’s attempt to flatten. Now, as a result, we appear to be on the cusp of returning to normal in relation to meetings and work minus interstate/international travel. 

So, let us first thank those tireless workers in government – and even more the tireless workers, nurses, doctors, ambulance workers, lab techs and the like who have been on the front lines of the battle to conquer this pandemic, which so far has afflicted nearly 7,000 and caused the unfortunate deaths of 97.

Washing hands to stop the spread of COVID19

Although it may not necessarily be enforced in future; we recommend taking Hygenic precautions in relation to social gatherings.

Health experts believe that we may all have to maintain social distancing for a while, especially in the winter, according to an infectious disease epidemiologist.

Ending the quarantine and lockdowns will involve a two-step process:

  • Step 1: Minimise community transmissions.
  • Step 2: Minimise chances of increased spreading of infections and respiratory diseases in the winter.

Yes, Australia is considering the gradual lifting of restrictions due to the pandemic, thanks to the effective measures to flatten the curve. However, there is still a long way to go. Officials remain wary, and citizens are urged to download and use the tracing app, COVIDSafe.

We all know that the central aim is to extinguish the epidemic while at the same time returning the economy to normal, if not more than it was before COVID-19 hit. And make no mistake about it, real estate, whether for individual homes, investment property, or commercial undertakings, will be, as it is already, a big part of the economy.

According to the Reuters article, “Australia’s housing downturn a larger-than-expected drag on economy,” nearly 6 per cent of Australia’s $1.3 trillion, or $780 billion, comes from the real estate sector despite the downturn in real estate for the last year or two.

And in point of fact, for those in the fortunate position to buy, there has never been a better time to buy. As shown on our website, the per annum rates for real estate at present are as low as 2.19 per cent. Just two years ago, the rates were as high as 5.79 per cent!

So here is the plain fact: Quantum Finance, one of Australia’s biggest mortgage financing companies, still finds a sizable amount of real estate loans for customers.

And we are teaming up borrowers with dozens of mortgage lenders willing to help refinance a real estate loan. This way, customers can take advantage of the lower interest rates to reduce their overall monthly payments.

Gavin and Levi in a meeting discussing Quantum's future.

What Else Are We Doing?

We at Quantum Finance see a great deal of opportunity during the present COVID-19 market.

One of the things we have noticed is that a great many Australians have now changed course. There are those who have already attended an open house with a realtor or perhaps even made an offer. However, for some reason, they never got to the finish line of letting Quantum Finance select a lender for them.

These people may have already viewed a house the traditional way and know the value of it now choose to buy or at least think about buying in May of 2020.

We are receiving called from people who expressed interest in buying and mortgaging in the past, and we are getting very receptive and appreciative feedback in relation to the advice and support we offer.

Banks Are Helping – but There is a Catch

Banks are offering assistance to Australians during these hard times. They are currently allowing up to six months’ deferral on home mortgage loan repayments. However, individuals should prove that their jobs are affected by the pandemic – meaning they have been laid off, lost their jobs because they got sick, or the company shut down its operations.

In order to apply and get approved, you must show verified documentation, such as a doctor’s note or a severance form from your company. Plus, many banks will only approve three months of payment deferral. The next three months will be up for review, depending on your situation and their other requirements.

But on the bright side of things, the government has already announced two coronavirus stimulus packages for small businesses. That way, the economic impacts of the pandemic will be controlled or at least cushioned through specific schemes, such as the cash flow boost and apprentice wage assistance.

There is also a business loan guarantee for companies to access working capital. The government will guarantee 50% of new loans for businesses, although only individual candidates will be approved. 

The Coronavirus Small to Medium Enterprises (SME) Guarantee Scheme is for businesses with turnovers lower than $50 million. Under this scheme, eligible companies can get a loan of up to $250,000, payable up to three years.

These loans are unsecured and do not require repayment for up to six months. It is, however, a debt, and therefore, you should ensure your business can pay the entire amount on the specified due date. 

Borrowing Amidst the Pandemic is a Good Idea

Fixed rates are lower than ever. We have been helping a ton of clients over the past four weeks or so. These clients are more than willing to refinance their loans. With interest rates cutting to historic lows, plus the $4,000 refinance rebate, it is a great time to evaluate your home loan with our help.

Preparing for the Future Real Estate Rush

We are gearing up the lead generation function in our business. It will allow us to give customers every opportunity to take advantage of low rates for new purchases, whether for residential, commercial, or investments. We then give thousands more the chance to refinance. But a big part of our efforts is focused on preparing for the post-pandemic rush that will inevitably come.

In fact, contrary to popular belief, while there is a note of caution from some buyers, activity has actually picked up in real estate in some areas.

For example, in March, RealEstate.com.au posted “Western Australia’s property market holds strong during COVID-19,” which reported that not only are real estate prices are holding their own in Western Australia, but in many cases, activity has increased.

And this increase in activity does not just exist in Western Australia. Many people from Hong Kong and China are investing in Western Australia properties, and they also want to partner with realtors in Australia to sell Australian property in their home countries.

We expect a rush to buy a property and finance them through loans beginning perhaps in January of 2021.

Experts predict, and we agree that for the short term, there will be fewer overall sales in Australian real estate, hence fewer loans.

However, whether it happens in January, February, or March of 2021, we predict a rush to buy real estate in Australia in 2021 to be the likes of which we have never seen.

As a consequence, we are reviewing every step in the mortgage process to ensure when that rush happens, that we can find lenders for our future customers in the quickest and most expeditious way possible.

Elizabeth Quay bridge in the evening in Perth.

Summing Up the Current Situation and Points to Consider

  • There has never been a better time to buy or refinance. Rates are at historic lows, and bankers are still lending.
  • We are reviewing all extraneous loan processes. We are double checking all back-end and loan processes to be sure Quantum Finance is incredibly responsive. Also, we have solid back-end training in place.
  • In early 2021, we expect a tremendous need for our services. When the pandemic is over and the rush of buying starts, we expect to be busy almost 24/7. We are already touching base with experienced brokers who will want to join our staff, and we aim to be the most responsive mortgage broker service in Australia.

A Bright Future Ahead

To all of our past and future clients, we say stay safe and do what you need to do to minimise the effect of the current pandemic. But also have faith in the future. 

Not only will we as a nation and a community get through all of this, but Quantum Finance will be there to help clients bounce back stronger than ever.

Sincerely,

Gavin Harrigan, Managing Director of Quantum Finance

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** Comparison rates are based on a loan of $150,000 over a term of 25 years. WARNING this comparison rate applies only to the example given. Different amounts and terms will result in different comparison rates. Costs such as economic cost and cost savings such as fee waivers are not included in the comparison rate but may influence the cost of the loan.

* Please note not all loan types are suitable for all applicants and the above rate is for general advertising purposes only. Please check the applicable rates are still valid with a Quantum Finance broker. Your full financial situation will need to be reviewed prior to acceptance of any offer or product