It’s no doubt that Covid-19 has threatened the stability of many aspects of the economy, with real estate being one of the unfortunate victims. But for better or worse, we’ve already been through this rodeo once before – during the housing recession of 2008. Coming out of it, we learned a thing or two about what we did wrong, which prepares us to make more informed decisions this time around. Here are some brief tips on what you can do to navigate the housing market during the pandemic.
If you’re a home buyer
It’s most important that you live within your means. So, you shouldn’t look to get the maximum amount the bank can give you for a housing loan, because this will mean higher monthly payments. Based on what we’ve learned from 2008, this caused a lot of home buyers to go under. Be more careful and realistic with what you can actually afford – housing expenses shouldn’t take more than around a third of your income.
If you’re an investor
Many investors panicked in 2008 and failed to work on long-term portfolio objectives, which caused them to either panic sell or just follow what everyone else was doing. This meant that some were unable to recover after the market came back in 2009. So, be sure to keep a level head and focus on the long term instead of worrying about short term losses.