The COVID-19 outbreak has put Melbourne back on the market for buyers. And while there have been some hurdles, such as a recent sudden ban on inspections of existing homes, experts say it is an “opportunity period.”
The Australian housing market during the outbreak
According to RealEstate, Hotspotting founder Terry Ryder wants buyers to stop “chasing rumors.” “You just need to know that one side has more power than the other in a negotiation, and in this case, the buyer who can move has a lot of power.” So, is it a good time to buy? As house prices fall and competition declines, the simple answer is “yes”, if you are one of the lucky ones to remain financially safe during an outbreak.
Advantage Property Consulting director Frank Valentic pointed out that in the past 12 months, the days of the seller has been excellent, but buyers have more opportunity now. He said: “if there are sellers want to sell, are you sure you can pick up to a good price.” Valentic said, now the seller will be sold at a low or moderate price, and in a month ago, maybe higher than 20%.
Leon Jacques of Cohen Handler believes there is an opportunity for buyers to buy a new home at a discount. The veteran buyer’s agent estimates he saved up to 10 percent on a property for a client, because of the market uncertainty created by covid19.
“In the next two to three weeks there could be a big discount and something like 5-10 percent is not unreasonable,” he said.
Hotspotting analysts are predicting a sharp drop in activity, with many potential buyers abandoning the market for cash and sellers exiting the market, which means fewer homes, but also less competition.
Of course, the COVID-19 pandemic is an unstable crisis, and this situation changes from week to week.
Sebastian James of buyer’s agency Hunter James believes some property deals will continue as Australia struggles to cope with the worst health crisis of our time.
“The smartest buyers are patient, but they are not afraid to take action when opportunities arise,” he says. So, how to bargain with the owner? “You can make an attractive offer and get owners to cut the price by 5-10 percent,” said Andrew Date, an industry insider. “You can tell the owner when I buy the house, I can lease it back to you for six months or more, so it won’t affect your life during the outbreak,” he said. Also, Andrew says buyers can get discounts if they can demonstrate the strength of their funds or the speed with which they can approve loans.
Tips for buyers during the new outbreak
- If you can afford it, treat it as an opportunity.
- Be flexible with your needs
- Prepare for more options, let yourself have a stronger negotiation ability (such as telling the seller, if he do not accept your offer, you have other housing options)
- Be creative when negotiating (e.g. lease back to the owner)
- Show the seller that you can make a quick purchase decision