2019 brought negative growth in consumer borrowing in Sydney and Melbourne and a predicted increase in return of settlement (Deloitte Australia, 2020). The unpredictable COVID-19 Crisis has caused many lenders and banks to slash interest rates - according to MOZO, last week ING dropped its 2-year fixed rate to 2.09%. Interest rates are also expected to continually decrease in the coming years (Fleeting, 2020).
The Government’s Response Through Policies
The government is progressing with the First Home Loan Deposit Scheme through the extension of the loan approval period by an additional 3 months. However, this may not be enough for buyers to continue with their property buying journey. Morrison continues with proposals of tax cuts for firms earning under $50 million, while personal income tax cuts begin the following financial year despite introducing new measures such as the subsidy scheme (Opray, 2020). To help businesses, Morrison has announced a new subsidy program to prevent millions of people from losing their job. “The subsidy is the central plank in a $130 billion economic stimulus package, the third and largest package the Government has announced in response to the coronavirus” (Worthington, 2020)