Following Prime Minister Scott Morrisons' announcement of the escalation of isolation measures, caused by the rapid global spread of COVID-19 (24th March 2020), there has been increasing noise towards the impact on the residential property market and more specifically, buyers, auctions and open homes.
As the COVID-19 response increases daily, it seems that astute buyers are adapting and still adopting social distancing protocols to either purchase a home or view rental properties.
While the mainstream media is quick to paint a picture of impending 'doom' for the property market, the evidence from those on the ground suggests otherwise.
With such a rich culture in innovation, is it any wonder that we are implementing changes to the way we do business in these unprecedented times? Absolutely not.
In response to the unfolding COVID-19 pandemic, real estate agencies are utilising technology and adapting their business models to adhere to strict isolation protocols outlined by the Federal Government.
Agents are widely using online virtual tours and holding private inspections with strict hygiene and sterilisation protocols.
The whole persona of the buyer has changed! With recent reports from RealEstate.com and Domain Group indicating a new type of buyer has been produced in light of this pandemic [1], [2].
This buyer has the intent to purchase in the immediate to short term, as opposed to in 12 months time.
From a domestic perspective, buyers attending inspections cited reasons such as:
“We needed somewhere to live and we had sold our apartment a week earlier."
“There is an end date with this virus."
“The alternative case is to rent a place to live … when we compared the numbers, we felt they were roughly equivalent. The cost of renting in a low-interest environment was the same as buying so it made a lot of sense to buy a house as opposed to an apartment.”
Key takeaways
At the end of the day, there will always be a need for housing and despite the current global health crisis, buyers and renters alike will still be driven by the necessity to find a place to live.
The economic effect of COVID-19 remains to be seen, property purchases in markets with strong underlying fundamental drivers will remain resilient during this period of uncertainty and will be well-positioned for when the economic recovery begins.
When considering purchasing an investment property, you must take a long term view and consult with appropriately qualified professionals before making any decisions.
Bradley Wearne - General Manager & Head of Research at Meridian Australia
P: (02) 9939 3249
References
[1] Realestate.com
[2] Domain Group