Consumer confidence and job security are two major purchasing factors buyers consider when choosing to purchase a home. Property data and analytical provider, CoreLogic, has reported a slowdown in the housing market activity in the past month as unemployment rates continue to rise. A survey conducted by CoreLogic found that buyer enquiry has already fallen 50 per cent due to falling buyer confidence caused by the sharp decline in consumer sentiment and the rising unemployment rate.
While the share market has been negatively affected by the pandemic, it doesn’t mean the property market will be hit as bad. The share market is forward looking and tends to drop quickly when there is a crisis, however the property market moves at a different speed and will often take longer to react to a crisis because the property market is mostly made up of home buyers and not investors.
The Australian property market fared well during past economic shocks but there is no clear cut evidence of how it will perform during the Covid-19 pandemic. What is evident now is that property transactions have dropped. Experts are commenting that this is a short-term event and that even if house prices fall, it will bounce back soon.
It is highly likely that house prices will drop due to the pandemic. CoreLogic has already reported that clearance rates over Easter were the lowest preliminary results recorded since 2008 and while the housing market was gaining momentum due to interest rate cuts, the pandemic has stopped it in its tracks.
A lot of luxury and high-end properties can be purchased at a much lower price at the moment. This is likely due to the fall in the share market, many people not receiving bonuses or having their business affected by lockdowns. Regional markets that do not depend on tourism or hospitality and well-located homes in middle-ring suburbs might not suffer as much.
While the current low interest rates make this a market for buyers, the growing unemployment rate is making it more risky for some. The extension of the federal first home buyers scheme is also favourable for first home buyers who are in secure jobs. Despite that, property owners who don’t have to sell right now are willing to wait to give agents time to create competition to achieve their desired prices, so they still have the upper hand.
With a ban on mass open homes, buyers are relying on virtual and private inspections. You can expect us to film your property and possibly conduct online meetings from your property. If there are private inspections of your home, we’ll ensure prospective buyers keep their hands in their pockets and avoid touching surfaces in your home. However, you should always disinfect your property following an inspection.
Although we’re still able to hold a private inspection of your property, in some cases we cannot ask you to leave your home for the inspection. This means we’ll need to coordinate any private inspections with your legitimate reasons for leaving the house, such as shopping for essentials, working or exercising. You will not be able to leave home if you are in mandatory isolation.
While you won’t be able to sell your property in an on-site auction, you can still sell through an auction held online or over the phone. You also might find that buyers are looking to purchase through a private sale.
Depending on the location of your property and the demand in your area, selling during the Covid-19 pandemic might be favourable for you. Speak to us today about putting your property on the market.