COVID-19 has placed immense pressure on the economy of the nation and the personal finances of most people. Projections on the future have been gloomy and yet people have been able to eke out a living in spite of the limitations that the social distancing have placed on society.
The Commonwealth Bank, the country’s largest bank, painted a bleak picture of Australia’s property market in its third quarter trading update on Wednesday, with forecasts that house prices could plummet up to 32 per cent as a result of coronavirus. On Thursday, Australia’s Bureau of Statistics noted that almost 600,000 workers had lost their jobs in April.
Despite the negative outlook, projections that property prices may fall by 10 to 30 percent do not seem likely and estate agents canvassed by Neos Kosmos reported that business has been ongoing although it conditions have forced big changes in the way things are done. And provided the current situation is not prolonged.
George Pangalos of Jellis Craig in Doncaster said that while prices have come down it was more like five percent.
“COVID-19 (regulations) has done a lot of qualifying for us in that we are getting the more serious buyers expressing interest who have had their finances approved and who now need to move forward,” said Mr Pangalos.
“We have been working from home for the past seven weeks, with an iPad and a phone to chase up all enquiries. I will go out looking for a property but there has not been too much face-to-face.
“We have used Zoom a lot but the technology has not been seamless and it has been a bit clunky
Stavros Ambatzidis, a co-director of OBrien Real Estate, said adapting quickly to to the new conditions has been vital. In the first weeks of the lockdown social distancing and hygiene measures meant that there could be no property auctions or open houses or inspections.
“We have had to arrange for one-on-one inspections, we videod the properties to show online and we have been holding online auctions,” said Mr Ambatzidis. “We averaged one inspection every half hour.”
George Ioannou of Harcourts in Thomastown said that with social-distance restrictions easing, it was possible to have onsite inspections although only 10 people may be able to attend and that this will be reviewed in three weeks. It will also be possible now to have open homes.
“It has been more time-consuming to attend to set up one-on-one inspections of houses as they require more calls to be made and more organising to secure bookings for visits,” said Mr Ioannou.
In some ways the conditions of business of the past few weeks have meant that only serious buyers will take up an estate agent’s time.
“Most buyers now have more time to answer calls and to answer key questions” said Peter Konidaris of OBrien Real Estate in Keysborough.In his case the offices stayed open because they are in a large premises that allowed for social distancing rules to be effective along with the necessary hygiene practices
“At the auctions now we will be able to have 10 people attend along with auction staff so we are better off because they will be serious bidders,” he said.
Mr Konidaris said that there had been two online auctions last weekend and one of the properties sold for just $10,000 below the pre-COVID 19 reserve prices.
“This is not as bad as during the Global Financial Crisis. There is a shorter supply of property for sale now.”
This was confirmed by Mr Ambatzidis who estimated that there were 30 percent fewer properties on the market than last year.
“People are scared over what is going on and have withdrawn their properties. So prices are likely to remain stable or even go up. It is actually a great time to sell because there are fewer properties for buyers,” said Mr Ambatzidis.
Mr Ioannou said that while there has been a lot of uncertainty and job losses there were people who are still working and who were looking for property. He said last Saturday his group had held four online auctions which was 10 percent of online auctions held in the whole of Victoria.
“It has been a good buyer’s market for the last two and a half years and when things lift there will be a big lift he said.
Mr Pangalos said that even in such times of crisis as now there was still a demand for property.
“A lot of people who are working from home are keen to make a move. People come in face masks and gloves and who are cautious of touching anything are still out looking.
“We had a property up for sale over 12 days. Forty-two people inspected it in that time. Eight people put in offers with three offers over $2 million. The property sold for $2.15 million. That gives you some idea of the demand for good property,” said Mr Pangalos.
Mr Ambatzidis said that many of the people currently expressing interest were working in essential services where there pay had gone up in the current situation.
“The banks are quiet and more than willing to offer loans. You hear grim stories but people who are working are looking to buy,” he said.
Mr Konidaris concluded: “For now, things are not as bad as feared. What could make things worse is if this drags on for five of six more months.”