PROPERTY MARKET UPDATE- MAY 2020
How is our Local Property Market affected by the Economic and Social Effects of Covid-19 ?
PROPERTY MARKET UPDATE- MAY 2020
It’s impossible to tell what the future holds for Australia’s property market amid the rapidly evolving pandemic situation. But we are starting to see a change in dynamics and it appears the rental market is the first to be hit.
Rental Market
Rental listings and vacancies are on the rise. This is partly because many homes that were rented out as short-term accommodation are now being listed as long term. And also because of oversupply of apartments for lease.
Job losses are also having an impact. The one major influence on rental activity is a change in employment conditions, and we’re now clearly seeing COVID-19 impacting the rental market.
Search activity from renters is down over the past two weeks but it is also down year on year. This is unsurprising given that most renters are young and fall into the low-income bracket.
Renters are also often casual workers and are most likely to be exposed to the industries that have been hit first by this pandemic; hospitality, retail, entertainment and travel.
Interestingly, there has been a lift in “Share accommodation”. Sharing makes sense when your income takes a hit.
Compounding the issue is a drop in demand as more renters are moving to share accommodation or moving to live with family. We don’t know what will happen to rental prices just yet but it’s likely prices will fall.
I am personally overseeing my company’s rental vacancy listings to protect Landlord’s investment. We are conducting inspections via video or in person, 7 days a week, adhering to social distancing rules.
We are also in close contact with existing tenants, and have assisted tenants find employment or help them apply for Government assistance
Buyer Market
While the rental market is starting to show signs of the impact of COVID-19, the buyer market is holding up relatively well, for now.
Enquiry levels have slowed over the past 4 weeks but it is still well up compared to the same time last year. While buyers are stressed by COVID-19, they are not as negative in sentiment towards property as they were in March 2019, which was when we were in the midst of the Financial Services Royal Commission and there was a lot of uncertainty around who would win the Federal election.
The reason we’re still seeing high levels of buyer interest and activity, mainly because interest rates are incredibly low and access to finance is good. Buyers still need to transact. In the past 3 weeks we have listed for Sale or SOLD :
- 26A Whalans Rd Greystanes SOLD 49 Dawn St Geystanes
- 26 Holroyd Rd Merrylands SOLD 1 Rowena St Greystanes
- 69 Hopman St Greystanes 21 Picasso Crs Old Toongabbie SOLD
- 23 Ringrose Ave Greystanes 70 Dahlia St Greystanes SOLD
- 35 Baden St Greystanes 84 Betts Rd Merrylands West
- 8 Alpha Place Greystanes
Investor Market : Property Market as an Investment Strategy
While property will be impacted over the next month, it is still generally considered safer than the sharemarket, which continues to show incredible amounts of volatility.
As yet, we are not seeing distressed sales, likely because most banks are now offering six-month mortgage repayment breaks to people impacted by COVID-19 job loss.
Investors without a tenant may struggle to pay off loans, and as unemployment rises we might start to see distressed sales occurring.
Summary
It is too early to tell what the ultimate impact on the market will be. We are definitely in unchartered waters.
Data on the local Property Market will be available in Mid April and we will keep you updated on the results and findings.
If you have any enquiries about your home or investment, please contact me on 0430 393 396.
We can strategise and problem solve any concerns and ensure we get through this tough time together,
Stay Safe,
Francesca Luccitti
Director