How has the pandemic changed the property market
Before COVID-19 struck and the whole country went into social distancing mode, the biggest challenge for the national property market was a glut of buyers and a scarcity of sellers.
As we emerge from the health crisis, the same conditions are apparent – but there is much more trepidation from buyers than there was previously.
As the country initially went into lockdown in mid-March there was a slump in search activity on realestate.com.au, but since the JobKeeper package and mortgage holidays have been announced there have been consistent week-on-week increases in the number of people searching for properties to buy.
As well as the high volume of general search activity, there has been a spike in serious buyer activity, which includes buyers who look at specific listings a number of times, look at the photos for a listing multiple times, save the property, share the property and/or make an inquiry with the agent.
High demand doesn’t necessarily point to a seller’s market
While many people are looking closely at properties, there still seems to be some caution about transacting, which is not surprising given the country is in the midst of its first recession in almost 30 years.
In addition, the low volume of properties listed for sale could also be driving higher levels of buyer search activity compared to when stock levels are more normal.
The good news is that the volume of new stock advertised for sale has started to increase over recent weeks as consumer confidence creeps back and virus restrictions ease. However, new listings are still lower than this time last year and well down on pre-COVID-19 levels.
How should vendors navigate the COVID-19 property market?
Strong buyer demand and limited vendor competition are good indicators of a seller’s market, but reluctance from buyers to proceed with a transaction makes the COVID-19 property market a little murky for vendors.
However, it’s still possible to make a sale albeit with a different approach:
1. Set a reasonable price
Vendors still need to ensure they are setting reasonable prices for their properties.
While a lot of people are interested in properties, we are in the middle of a recession, so money is tight, and no one really wants to be spending more than they have to.
2. Don’t expect a speedy sale
Despite the lack of competing stock, vendors shouldn’t expect transactions to happen quickly.
Although a well-priced property is likely to garner plenty of interest, receiving offers for properties will be more difficult than it would be when there is far more demand than supply. The reason being that there is still that level of caution from buyers.
3. Think about different modes of selling
Vendors might have to think outside of the square and be more selective in the way that they try to sell their property.
With buyer caution and still some social distancing measures in place at open-for-inspections and live auctions, vendors will need to think about the best method in which to advertise and sell property including rethinking auctions for certain properties.
Providing more transparency about a property to buyers is also key including advertising with a price, including a virtual tour in the listing and providing a far more detailed advertisement.
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