Selling in Covid-19
Selling in Covid-19
What we are seeing is Covid-19 + typical seasonal listing volume = low listings on the market and high buyer competition. This means great prices for our clients.
When the COVID-19 situation eased in Sydney and real estate agents were able to hold open houses again, Phil and Cathy decided to test the market.
“We only had three people round but all three were serious buyers, they all put in offers and we got the same price we would’ve before the pandemic,” Phil says.
The couple are now cashed up and looking to leave Sydney and buy elsewhere.
Both working in the health service, they can find work anywhere and are completely open-minded about where to settle. “We just want somewhere near the surf or bush, with a decent garden, where we can find our tribe,” Phil says.
There is an exodus of Phil and Cathys leaving Sydney at the moment – Hunter Valley real estate agent Natasha McElwaine from McElwaine Estate Agents says over 85 per cent of enquiries are now from Sydneysiders.
Discovering they can work from home and only endure a city commute when necessary, they have all been pleasantly surprised that, despite predictions that house prices were set to plummet, the market is still holding up and a dream can become reality.
The July monthly index from property data and information service CoreLogic shows Sydney prices dropped by only 0.8 per cent in June while regional areas held steady. And CoreLogic, along with most experts, have expressed surprise at the way the market has bounced back. Although activity fell by around a third in April as open houses were out of bounds, it quickly came back by 18.5 per cent in May and are up 13.3 per cent over the past 12 months.
“Predictably, of course, there are less houses for sale – listings are around 34 to 40 per cent down – but in many ways this is also a positive as it means the market hasn’t been inundated with distressed sales as feared.” In other words, not many people are selling because not many people have to sell, says a CoreLogic report.
“I think it’s important to remember sales volumes are always lower this time of year,” says McElwaine. “If anything, sellers should be excited by the higher than usual buyer activity brought on by government stimulus as a result of COVID-19.”
At the moment, the experts predict price falls of anything from two to 30 per cent, however. “As with everything else in this pandemic, all that really shows us is that they’re not sure what will happen,” says McElwaine.
What is certain is that banks, Federal and State governments will all do everything they can to ensure there isn’t a housing market catastrophe. “The longer term outlook for the housing market is largely dependent on how well the economy is tracking when (government stimulus) support measures are removed,” says CoreLogic head of research Tim Lawless.
Governments, too, are aware that when the housing market is buoyant, it’s a sign consumers are feeling confident and this has positive flow-on effects to other sectors of the economy. They will take some comfort in the fact interest rates are the lowest in history, and most homeowners have a good equity buffer but will be considering other options. The Federal government has already introduced its HomeBuilder program and is likely to introduce a generous first-time home buyers grant while the NSW state government is looking at abolishing stamp duty and replacing it with a land tax.
“Additionally, our market is a small area that’s traditionally insulated well against downward economic pressure,” says McElwaine. “Case in point, figures from the Labour Market Information Portal show unemployment rates in the Hunter have continued a downward trend even through the height of COVID-19, down to 4.7% vs 8.4% at their height in 2015.”
What to consider:
If you’re looking to sell
With so many Sydney buyers looking around, think about what you can offer that they may be craving. Peace, space, affordability and a good coffee shop are obvious drawcards but if you’ve got a decent back yard, that could be a big plus. Invest in a couple of raised garden beds and espaliered fruit trees to illustrate the possibilities of growing your own. If you live near a surf beach, don’t underestimate the misery that Sydney surfers have endured this summer as their beaches have either been closed or crowded out.
If you’re a first-time buyer
Research shows that Generation Z is currently the most optimistic about property purchase opportunities. The Hunter market remains a great choice for investment with a more stable rise in property values. Experts are also tipping the Federal government to announce a first home buyers’ grant of at least $20,000 towards newly-constructed homes.
If you’re selling and buying
Many householders often decide not to buy and sell because of the cost of stamp duty. However, with the NSW state government considering phasing out stamp duty and replacing it with a land tax to help support the housing market, that expense may be avoided. Do weigh up if this could cost more long term. Purchasing now before these changes could save you thousands of the course of a 30-year mortgage. It may be that buying and selling sooner than later could save you in the long term.
If you’re buying as an investment
Normally Australia welcomes around 250,000 new immigrants and the majority head straight for the rental market. In addition, the biggest redundancies have been in the hospitality, tourism and arts sectors, all areas in which a significant number of workers typically rent. Many have had to abandon leases and Sydney’s rental vacancy rate alone has risen to four per cent. Looking to the Hunter as an option could yield much better returns. In the same time frame vacancies in the Hunter are at just 2.4% and rent returns have risen 1.8%.
Australians do seem to be rediscovering the pleasures of holidaying at home, however, so if you spot a bargain in a favourite tourism area, it’s worth considering but bear in mind letting agents are more stringent than ever regarding cleaning standards between guests. If your property is likely to attract short-term stays, you may find profits eaten up in cleaning fees.
If you’re buying in the hope of capital gains, keep an eye on the market for bargains.
McElwaine Estate Agents always acts in our clients’ best interests. Our inspired and world-class model is founded on unique, creative strategies that capture the emotional heart of your property and is backed by an experienced team that offers genuine care for every person we partner with. You’re welcome to contact us today.