Australia’s largest independent property valuation and advisory firm has called for easier access to existing equity in homes and investment properties would to ease financial pressure for Aussies during the COVID-19 crisis.
Herron Todd White CEO Gary Brinkworth said both the government and regulators must urgently work with financiers to unlock this source of stored wealth and help struggling individuals and businesses through this unprecedented time.
“If ever there were a time to help Aussies get access to their stored-away property wealth, it’s during the coronavirus emergency,” Mr Brinkworth said.
“The integrity and discipline of the current lending system can be preserved and leveraged to help property owners through this challenging period.
“We believe the time to act is now, to provide additional liquidity to eligible property owners to help them navigate these uncertain times, creating an opportunity to survive this downturn and establish a strong position which will help contribute to the economy.”
Mr Brinkworth said the COVID-19 crisis had highlighted how some Aussie property owners were ‘asset rich, cash poor’ and providing the ability for many property owners to access the equity in their assets is a clear way to not only survive the uncertainty of the next few months but position property owners to bounce back quickly.
“As property professionals, we realise the level of equity drawdown and the impact on property values due to COVID-19 will need to be part of the discussion, but it’s ludicrous to not have this conversation in the current climate,” he explained.
“There’s an important role valuers will play in preserving the integrity of the financial system while unlocking additional liquidity during this challenging period.
“As such, we will be supporting our clients and our industry body, the Australian Property Institute, in their efforts to put this initiative front and centre.”
Mr Brinkworth said from his discussions with industry associates, finance providers seemed ready to act swiftly in making equity available to owners.
“This kind of industry support and through Government incentives and the cooperation of the different stakeholders, should allow us to realise the potential of this initiative at a time when people need it most,” he said.
The nation’s strong real estate sector had been a leading source of wealth building through decades of sustained value growth, and Mr Brinkworth said under normal circumstances, equity was a wealth buffer for owners to reinvest or live on in retirement, but it should now be drawn upon as a financial safety net.
“We are calling on the government and regulatory bodies, to work together to make this possible, to encourage property owners to leverage their equity.”