How to navigate buying property during the COVID-19 crisis
COVID-19 has gone from a distant news story to now impacting every one of us at a speed that has taken the nation – and the world – by surprise.
Adaptation is now paramount for every operator, in every industry, and real estate is no different. Service providers need to find ways to adjust, and fast, because people still need to buy and sell property – perhaps even more so once the real economic impact starts to play out.
Let’s look at some of the potential effects of Coronavirus on the Australian property market.
March/April 2020 – immediate effects & emerging trends
The Australian property market changed overnight on March 25, with both in-room and onsite auctions, and open homes, being banned by the Prime Minister and industry bodies bracing themselves for (and lobbying against) further restrictions.
Buying a home or an investment property is a significant decision often fraught with potential stresses at the best of times. So not surprisingly, we already see a softening in the market and both investors and homeowners putting searches on hold.
Having said that, there are existing ‘cashed-up’ buyers out there who need to buy now, having already sold their existing house. Investors will also certainly look to make the most of the current situation and buy discounted stock. Prices are, as you’d expect under such circumstances, coming off. With lower levels of buyers in the market, competition is not as strong, which means that results have not been as high as they were even a couple of weeks ago.
In the medium term, as employment fluctuates and, devastatingly, people lose their jobs, many Australians are going to be highly motivated to sell their property. This will cause further softening of prices in the property market and, because of social distancing rules and the measures people are taking to prevent possible infection, it is becoming increasingly difficult – and unappealing – to do even private inspections.
This will likely be the case for the next couple of months as the Coronavirus pandemic peaks – and is hopefully resolved – in Australia.
The longer-term projection?
Once we’ve managed to get through this immediate crisis and the worst of the pandemic’s impact has dissipated, we’d expect is for people’s collective fears to diminish fairly quickly, resulting in a jump in pricing. Buyers currently holding off their searches will return, increasing competition. But ultimately, it’s a grey area for both the Australian and the global economy, so the long-term economic impact of Coronavirus simply isn’t known.
Buyers, don’t be afraid to seek help
Buyers’ agents – agents acting solely on behalf of buyers during a property transaction – are inherently well equipped to help buyers navigate some of the immense challenges the COVID-19 pandemic presents.
Video walkthrough provides a full virtual property tour that can be viewed from anywhere in the world. These tours were originally created to service the needs of people who didn’t have physical access to view properties, such as overseas investors, however now this content can be made use of by everyone.
Bidding services are another option, enabling buyers to avoid auction rooms.
Advice from the experts
If you’re looking for your new home or a long-term purchase, negotiate now. You’ll find you’ll be in a marketplace that’s going to be down between 10-20% from its standard peak pricing, and you’re already getting a discount. If you’ve found what you feel is the right home for your wants and needs, don’t be too cautious about purchasing – if you have secure financials and have done thorough due diligence research.
A bargain-hunter will want to buy the cheapest possible property at the best price, so watch and wait over the coming weeks.
Make sure your finance has been approved. If you’re ready to act swiftly and secure the property that’s right for you, at the right price.
Nobody knows what the market is going to be doing in 6, or even 3 months. If you are in the market to buy property, do as much research as you can, and find out what your trusted experts – who live and breathe the market daily – are forecasting and would recommend for you as they may just point you to a great opportunity.
