Lifestyle migration a side-effect of Coronavirus
Victorians have never spent so much time in their homes and in their local neighbourhoods as they have done over the past three months. Forced into lockdown by the Coronavirus restrictions people are assessing where they live and how they live with fresh eyes.
Working from home orders drove people to shop locally, to engage in their local community in a way that they may not have been doing previously. Getting daily exercise led to back streets, local parks and paddocks being explored. The actual working part of being home led to an evaluation of homes themselves. Did they have a study or nook that allowed for effective working or was it a constant juggle between laptops, school work and food at the dining table?
For some, the lockdown was the final push to consider a move to a different style home, a different location or even to embrace a sea or tree change. With the success of the working from home experiment, many employers are negotiating with their staff for increased flexibility in their working arrangements – from totally remote to just one or two days in the office. This has meant that living near where you work or living next to a transport hub may no longer be the important consideration it used to be. Moving down the coast to a better lifestyle is a fair exchange for a few more hours on the road or train one or two days a week.
Website searches on lifestyle properties are on the rise and, in a perfect world, a lot of families would be on the move. But there are a few hurdles in the way.
Selling the property you are living in for a good price.
So far the market is holding up pretty well with minimal value drops over the last two months. The outer suburbs are proving resilient so far, while the more expensive inner-city properties have been hit a little harder. However, if you are moving to the outer suburbs or down the coast or into the hills, housing will no doubt be cheaper than in the inner to middle suburban areas of Melbourne.
Getting a loan.
With the country likely to be in a recession for the next nine months at the very least, banks are being even more cautious about extending credit. Prior to the outbreak of COVID-19 and in the wake of the Royal Commission into banking, banks were taking a very long time to consider applications and, no doubt concerned that job losses, once JobKeeper ends, will increase, are taking the time to run the ruler very thoroughly over applications. Those with good equity in a home they sell should have an easier path to a mortgage.
Stamp duty is undoubtedly a real impediment to selling up and making the sometimes lifestyle critical moves that people need to throughout their lives. Whether it’s moving because your family has grown, your family has shrunk, you need to move closer to elderly parents, changes of employment mean you can’t maintain your current lifestyle or you just want to get a work-life balance – the government expects a hefty clip of the transaction. For a tax that started life as a small fee to pay someone to physically put a stamp on a piece of paper, it has become a substantial tax imposition.