HOW HAS CORONA AFFECTED PROPERTY?
What a month it has been. With everything that has been going on, I bet there is one answer you are looking for in this report—what effect has COVID-19 had on the property market? Let me tell you.
People normally sit still during winter. It’s the way we’re programmed. Stock up the wood pile, dust off the family movies, and relax. The same thing goes for property investments. When it’s cold, people slow down. I’ll sell in the spring, they say.
Until 2 weeks ago, I thought this was the case with COVID-19. It was mimicking winter weather. People weren’t moving, few were looking around. But after Easter weekend everything changed. Put it down to improving conditions. Put it down to the ever-moving state of the market—people who are selling have to buy, empty houses need to be leased. In many ways, the property market has been corona-proof.
If COVID-19 has got you feeling like winter has come early, I’ve got some advice: it is the ones who fight the natural programming who benefit the most.
At the end of March, when coronavirus reared its ugly head, Alan Kohler summarised why we were likely to sail through this relatively unscathed on a national level. ‘Governments and central banks are acting forcefully now,’ he said. They have been building a wall of money, so to speak. This is true. Australia is a nation whose economy is largely founded on property. Real estate generates a lot of money for our economy, and Aussies are hell-bent on owning their own patch. It is a pillar of our way of life.
So the two questions are, how is the market now and what will it be like in a few months’ time?
While it is too soon to tell what will happen in a few months, we can make predictions based on the signs. There is a bottleneck of stock. We are encouraging clients who are confident in the value of their homes to consider a marketing campaign commencing in autumn. Significant numbers of home owners are selling in metropolitan Melbourne, and those people need to buy. The upside for any vendor is that if their property takes more time to sell than anticipated, realestate.com.au, Domain.com, and other providers are offering support to extend marketing campaigns without financial loss. It is a win, win.
That, and there are buyers around. Conditions are tough for agents, but then weren’t they tough during the Royal Commission into the banks? And media said the market would suffer then, too. There is a likelihood that this episode will adjust property values one way or another, so it has never been more important to be in touch with us. We will need to have a coffee in May or June and discuss the current situation as well as the forecast for Spring, because Spring is going to be big.
Restrictions on open inspections has had an interesting positive effect on the availability of buyers. We are not inspecting with just anyone. We are really only inspecting with qualified buyers. There are no tyre-kickers in the age of corona. The people who come out to look at houses intend to buy them.
Some vendors have asked if this episode will reinvent the way properties are marketed and sold. In my opinion, not likely. Real Estate agents are in the business of relationships, and no video or Zoom meeting is going to replace that. We have the support of technology, but proven methods of client interaction never change. Video augments what we do, but that’s it. In the last few weeks, I haven’t had a buyer choose a video tour over a private inspection. We are still here and we are still working hard.
There is no denying the dramatic social and economic impacts of COVID-19. I wouldn’t get very far doing that. And my advice is intended to be practical, not salesy. We’ve gone through anxious times of late, as any business—as any person or family—has. But the reality is, this will not be the status quo forever. And we are seeing positive signs of change earlier than anticipated.
The reality is, if we can sell properties during the biggest global disruption in 75 years, then any other time will be a breeze! But make sure you check in with us to ensure you have a handle on the value of your property. We are here to give you advice. I can’t put everything in a report, but there is a lot more to talk about, so give me a call any time on 5786 2033. Most importantly stay safe, stay home (where you can), and stay in touch