With many countries starting to see the light at the end of the proverbial pandemic tunnel, many governments have been easing quarantine restrictions so that the wheels of economy continue to turn again.
It has several months since Australia has been on widespread community quarantine with people asked to stay at home and prepare for the uncertainties that lie ahead. Even though there have yet been no guaranteed treatments or vaccines developed to fight the dreaded COVID-19 disease, somehow people have become aware of preventive measures to keep themselves safe from infection.
The pandemic has also rocked the real estate industry, where much of the traditional marketing and promotional activities for real estate businesses have been halted indefinitely such as open homes, auctions, property inspections, and face-to-face client meetings.
But while the pandemic has shaken the industry, it has not deterred enterprising and innovative minds to adapt to the situation by taking advantage of digital technology to continue doing what they do best- helping others realise their dreams of owning homes.
Now that the restrictions have been eased, it brings the industry new hope to face the new challenges head-on and determined to keep the industry strong.
What has happened and changed?
During the second week of May 2020, Victoria joined the list of states such as New South Wales, Western Australia, Queensland, and South Australia in facilitating and conducting on-site auctions bearing in mind to ensure proper health restrictions are enforced- a welcome development in the nation’s auction capital Melbourne.
For instance, social distancing measures such as limiting the number of participants in on-site auctions to a maximum of ten (10) attendees, excluding the number of agents needed to facilitate the auction process.
While it may take several months of stringent enforcement before restrictions rules can be dramatically eased, the industry has taken these changes well and transitioning into the new normal.
More changes expected in the near-term and long-term future
Additionally, there have been changes that could re-introduce the conduct of property inspections- similar to auctions- particularly for both rental and residential sales.
Open homes may very soon be resumed with a maximum limit of 10 people at any time, excluding those needed to host the inspection. Provisions are in place requiring agents to ensure collating pertinent visitor or buyer information such as names, contact details, and addresses, which may be needed should contact tracing be required.
While these modified guidelines have already been conveyed throughout the industry, it is imperative upon real estate agents to ensure that these policies are followed to the letter to ensure that it would help stave off the disease from spreading and ensure the continuity of business in the industry.
How the real estate market responded
While there is the uncertainty of what the immediate future may bring to the real estate market in the face of this temporary health crisis, it has been coupled with unprecedented levels of government intervention through a large-scale stimulus program along with lenders easing off on distressed borrowers and record low-interest rates.
All these have insulated the housing values despite slower sales activity.
While such an uncharted territory makes it difficult to predict the industry’s immediate future, it is further increased by the effects of a longer lockdown period, if need be. The longer the time it takes to contain the virus and bring the wheels of the economy turning again, the higher the risk of sliding down housing values.
Industry experts are expecting a dramatic drop in residential property sales in the coming months brought about by rising unemployment, the decrease in consumer confidence, and more restrictive lending practices and regulations.
The current lockdown also contributes to restricting on-site auctions and open homes, which is expected to slow down buyer activity and other related services such as conveyancing, inspections, etc.
Getting down to the numbers
During the same period, real estate industry experts believe that while they have seen some drops and growths in different areas, the market performance is indicative of the Australian market is a good and firm place to soften the impacts of COVID-19.
Property values rose in capital cities except for Hobart which saw a drop of 0.2% while during the first quarter all capital cities reported a rise in values, with the lowest quarterly gains were recorded at 0.6% in Adelaide and Darwin.
All put, though the last two weeks of March proved to be very challenging, the first two weeks showed a really strong performance, indicating that a government stimulus may not be needed to get the property market up and moving again.
Additionally, newer and lenient lending regulations have allowed homeowners to defer mortgage payments for up to six months allowing people to not worry about their payments during the lockdown period.
This would also allow property owners to hang on to their assets and put a hold on properties getting listed on the market.