The property market, like other sectors of our economy, has already felt the impact of COVID-19, but it is far from down and out.
Prices have held well in the early weeks considering the uncertainty that our society confronts, and clearance rates were more than 55% in late March.
A poll by industry researcher CoreLogic suggests agents are now experiencing falls in buying and selling inquiries of around 50 percent. While that’s an abrupt shift, it’s fair to say people are still buying and selling property.
New digital platforms allow sales to continue
Agents have changed overnight the way properties are marketed, embracing more digital engagement because of virus-related rules stipulate no gatherings of more than ten people.
Video tours and virtual tours of homes are becoming popular, and agents are always available to conduct in-person visits of a property with one individual, so long social distancing etiquette is maintained.
Auctions have changed, too. They’ve gone online, using specialist platforms. They’re proving so popular that this form of sale may become the norm when this crisis is over, making auctions on the front lawn a quaint piece of our history.
Buying opportunities still exist
Prices are likely to dip over the next few months but may be propped up by several factors. If sellers pull out of the market in big numbers, scarcity will become a positive pricing factor. Additionally, we are seeing stock market investors move cash into real estate, and foreign buyers take advantage of a safe U.S. dollar. The Reserve Bank has dropped interest rates to record lows, too.
Prices are relative
It’s important to remember that prices are relative and don’t affect only your property. If you’ve been thinking about moving up the property ladder, and you think your job is safe, then some excellent buying opportunities will exist for you.
Or, if you are considering an off-the-plan purchase, then you’re going to be in the box seat with developers, who’ll have committed millions of dollars to their project and be anxious about their immediate future.
Investors may exit if rents not paid
An uncertain factor for the market is how landlords and tenants will sort out rent payments – a hot topic in the media. If rents go unpaid for whatever reason, you’ll see many investors rush to offload property, which will depress prices but offer good buying opportunities.
In large cities, especially New York, there has been downward pressure on price for months, and the situation is unlikely to improve during the COVID-19 crisis.
Resist short-term thinking: this crisis will end
While the virus feels all-encompassing right now, the crisis will pass. The property market will continue to transact, albeit at diminished volumes. There’ll always be people who need to sell their home for whatever reason.
As best as you can, don’t be caught up in the moment and consider the long-term impact of your decisions. Many economists are already predicting a sharp economic recovery next year, and that will drive the market forward.