There is no denying that the past few months have been challenging, both in terms of personal hardship but also the ever-changing circumstances of how we now live our daily lives. With news and updates of COVID-19 constantly on our television screens and papers, we seem to be surrounded by information wherever we turn.
With the term ‘recession’ being tossed around as a result of the pandemic, there are many elements of daily life that will become affected. For many looking to buy or sell houses in the near future, it is important to understand the impact this economic turmoil will have on Australia’s property market.
How will the real estate industry look in the coming months?
What does this actually mean for buyers or sellers?
Alongside the RBA’s cash payout and the government’s extensive stimulus packages there is hope for soon to be buyers or sellers.
At this point in time there are two things that are valuable to remember about Australia’s housing market.
- The housing market in Australia is made up of many micro-markets. The market in regional Victoria is subjected to differing elements compared to the market in the Inner suburbs of Melbourne. This being said, it is important to remember that these micro markets will thus be impacted differently. A fall in the housing market will impact cities in contrasted ways and are based on various factors, including how many casual employees or small businesses are situated within that specific micro-market. Thus, you may be less affected by a market crash than others.
- The situation is ever evolving . Alike to the constant stream of information regarding the COVID-19 outbreak, the housing market is always evolving and is approached on a day by day basis. While there are signs of the market falling to some degree, there are some positive signs. Investors with extra cash or even first home buyers (who felt their job was secure) could opportunistically seize bargains but most people will take Prime Minister Scott Morrison’s advice and financially hibernate.
As the scenario remains uncertain, it is understandable that buyers or sellers are sitting on the fence and riding out the pandemic, however the market is reliant on consumer confidence, and there are ways to continue along your future house journey.
What does this mean if you are selling your home?
The process of selling your house will no doubt be considerably different due to a number of reasons. No contact or gatherings means house inspections, auctions and even meeting your real estate agent will be affected. Despite this, adapting to the changes have already begun and it’s more simple than you think.
- Online is key: We have moved quickly and begun to adapt and move online. Here at Compton Green, we offer online auctions, FaceTime and private inspections as well as 3D walkthroughs to ensure you’re not missing out on selling your home to buyers. Everyone is in the same boat, so it’s important to remember a changeup of traditional agent seller relationships and methods of selling will be inevitable
- There are still people buying: People purchase homes for a range of reasons, and this remains the same despite the current environment. While there are still individuals out there to buy your home, it is valuable to use all resources your real estate agent has on offer to ensure a better chance of selling and getting your property out there.
- Better now than later: As stated before, the correlation between the housing market and COVID-19 remains on the whole uncertain, therefore while results still remain relatively steady according to REIV and interest rates are low for buyers, now may be a better time than ever for you to sell your home.
What does this mean for Buyers?
There are a few strong reasons why it is now the perfect time to buy a house, it really just takes some confidence.
- The banks are on your side: With a record low cash rate and lenient lending, banks are now supporting you to buy your first home with as little financial strain as possible. With the RBA cutting the cash rate twice in March, Banks are passing these savings onto assisting you with home loan mortgages as well as some banks offering ‘mortgage freezing’ for up to 6 months.
- Use the technology: Alike for sellers, in this uncertain climate where everyone is urged to stay indoors, it is valuable to utilise technology real estate agents are adopting when you’re ready to purchase.
- Property is long term, COVID-19 isn’t. A bold statement, but a true one. There is no denying that Coronavrus and its effects won’t be around for the rest of our lives, and while it may seem that way now, there is light at the end of the tunnel. Purchasing a home however is decided on a variety of factors, some being more concrete than others. Cate Bakos, local inner west property buyer’s advocate and author at realestate.com.au suggests while markets may slide in the short term, they commonly increase over the long term.
Despite these suggestions, it is valuable for both buyers and sellers to understand their own personal situations and speak to knowledgeable people who can point them in the right direction. While there may seem to be a bit of a grey cloud hanging over your future buying or selling prospects, there are ways to overcome this and achieve a sense of control with the help of your agent.