20 April 2020
How Covid-19 is Affecting the Property Market
With the Easter holidays now behind us and the first week of remote schooling under our belts, some of the earlier uncertainty has started to reduce. The media reports positive results about ‘flattening the curve’ of COVID-19 and we now have hope that some of the stage 3 restrictions may be lifted as early as mid-May.
Unfortunately, that is still unlikely to mean a return to normal as we knew it. COVID-19 has created unprecedented chaos to our lives and livelihoods. Many Australians have lost jobs and closed businesses. Some have been luckier than others, but most people are just hoping to ride the lock-down as best they can and come out, not too scathed, on the other side.
The property market has not been left untouched by the disruption, with decisions around inspections of homes changing frequently.
We can only imagine the stress vendors (particularly those who had already bought) were feeling, being told they couldn’t have any buyers through their homes. Equally, buyers who had already sold and needed to find a new home or house to rent, were concerned they might find themselves with nowhere to live, or resort to buying/renting, sight unseen.
The Melbourne property market could see a new normal emerge from this crisis.
Private sales are now commonplace. While some agents (particularly newer or younger ones to the market) have not had much experience transacting this way, there are also a number of more experienced agents who are very skilled with this method of sale. Around 30% of the homes we buy are off market/private sale, so we are comfortable and experienced operating in this new space.
How was the Property Market Before Easter
Agents were contacting us daily (sometimes multiple times a day) with new property listings. There were a few good opportunities among the pickings and some of our clients, circumstances allowing, were lucky enough to be able to purchase good homes. We noticed that buyers who had been looking for quite a while were able to benefit from the increase in stock and decrease in competition. That being said, many sales were still competitive.
How is the Property Market After Easter
New property numbers have slowed. With uncertainty in our greater economic direction, many discretionary buyers/sellers may choose to wait until a clearer path is formed.
There will, however, still be a number of buyers and sellers needing and/or wanting to buy/sell for personal ‘stage of life’ transactions. For both parties these include, but are not limited to, upsizing, downsizing, death, divorce and financial reasons. Being ‘locked down’ at home has provided opportunity for some to appreciate their houses and locations, and, for others, has helped them realise that a change may be due sooner rather than later.
When and How to Buy
Everyone seems to have an opinion about when is the best time to buy.
- Is it when the market is on the rise?
- Is it at the bottom of a crash?
- Is it when there is plenty of stock?
- Is it when there are plenty of buyers?
- Is it when the interest rates are low?
- Is it when no one else wants to buy?
- Is it when everyone is comfortable to buy?
No-one can predict when the best time to buy may be. Our focus has always been helping buyers to maximise their chance of buying the right home at the right time in their life cycle (both financially and emotionally) when the right one comes along, irrespective of market fluctuations. If it doesn’t tick key buying criteria, regardless of what’s happening in the market-place, one shouldn’t buy.
For those wanting to buy now, what is the best way to go about it?
Some properties are still being advertised online; however, a greater portion of what is available for sale at the moment is not.
One agent, who has been in the industry for a number of decades, said they are enjoying the return to private sales, as they (the agent) get the opportunity for lengthy one-on-one discussions with the buyer, enabling them to extract enormous amounts of personal information to help maximise the price/outcome for the vendor.
There is the new option of virtual tours online and interactive floorplans, but there really is nothing like inspecting something ‘in person’ – to get a proper feel for how spaces work, how natural light is captured and if privacy from other properties is or is not addressed.
We think inspections can’t and shouldn’t be avoided.
Some questions buyers considering purchasing at the moment may like to contemplate include:
- How can you find out about these homes?
- Who should you talk to?
- What is agent ownership and how could it affect you?
- What information do you have to give the agent to inspect a property?
- Will this limit your ability to inspect homes?
- Are you the only interested party?
- How much is the property?
- Is there a process?
- Is the price fair?
- Is it really for sale?
Buying in an uncertain market has the potential to be risky. Prices could fluctuate unexpectedly up or down and potentially for a number of years. But, over the years, one thing stands strong with all our clients: they want the right information, so they can make a good decision to buy a quality property that has the flexibility to work for them for an extended period of time.
A sample of current “Off market” Properties
- Freestanding Edwardian with plans for extension to create 3 bed, 1.5bath, Malvern – circa $1.35m
- Large Federation family home, large land, Malvern East – circa mid $6m
- Contemporary family home with pool, Armadale – circa early $5m
- Modern townhouse, 2 bed, 2.5 bath, DLUG, Prahran – circa $1.7m
- Brick Edwardian semi, north side, Prahran – circa mid $1m
- Californian Bungalow, near amenities, north rear, Hampton – circa $2.3m
- Landmark Victorian home on large land, Camberwell – circa $8m
- Large family home on large land, north rear, Camberwell – circa mid $4m
- Contemporary family home, renovated, Ashburton – circa high $1m
- Californian Bungalow with opportunity to improve, Hawthorn – circa $2.8m