Property market outlook in COVID-19 recovery

As life in Australia settles into a new normal, we speak to two leading voices in property to get a sense of what’s changed in the property market, and what to expect if you’re looking to build in 2020.

Executive Manager of Economic Research at realestate.com.au, Cameron Kusher and Metricon’s General Manager, Drew Glascott share their perspectives.





Market impact

Australia’s largest property website, realestate.com.au continues to see keen interest in the property market, but transaction volumes have dropped. Kusher says that, “the impact of COVID-19 on the property market really reflects the impact on the broader economy...for property this has led to a reduction in transactions. The good news is confidence is improving, housing stimulus is in place and the economy is re-opening.”

When it comes to the year ahead, Kusher expects an uplift in the market. “As the economy re-opens and (hopefully) infection rates remain low”


Buying during recovery

“Ultimately the decision to purchase a property is the largest expenditure most people will ever make in their life and at the same time it is a deeply personal one,” says Kusher.

“The RBA has flagged interest rates will remain at their current levels for a number of years and now the federal governments and state governments are offering grants to those buying or building a new home. So it certainly could, depending on your financial position, be an opportune time to enter the market.”

 

First home buyers are making moves

First home buyers are very active in the market right now thanks to the HomeBuilder grant. Glascott notes that “first home buyer enquiry is actually up on this time last year.” COVID-19 has created unique conditions that may be favourable for first-time buyers.

“First home buyers generally don’t benefit from fast-moving or heavy investor markets, so the current conditions allow them to research and make thoughtful decisions, and not be rushed.” Glascott suggests.  With several government grants on offer, along with continued stamp duty exemptions , many first home buyers are seeing this as the right time to enter the market.”

 

Building in the new normal

The HomeBuilder scheme provides an incentive to build new, and “is something that buyers should take into consideration in the current market,” says Kusher. He notes, “it’s also imperative to do your research. Research where you want to live, how much you can pay and the track-record of the builder and developer of any new property.”

When it comes to the build process itself, Glascott says, “there has been no slow down to building single dwelling residential houses during social distancing, because “we don’t have a high number of trades on-site at any given time.” It’s commercial and multi-residential builds that have been most impacted.

In many ways COVID-19 has forced the industry to think in new and creative ways. Metricon had systems in place to pivot quickly, and says that its “operations team are working more efficiently, and fast-tracking jobs to the site."

  

New lifestyles are driving new trends

The changes COVID-19  has made to our lifestyles, has meant a shift in what buyers want and need from their homes.

Working and studying from home has been reflected in changing floor plan trends. “Many of our customers are drawn to home designs that include multiple areas to work and study from home. Dedicated studies and study nooks have certainly gone up the priority list.”

With many organisations looking to embrace working from home beyond COVID-19 restrictions, a home in an outer suburb or even a regional community is now being considered by many. This is a much more attractive option if you are only commuting a few days per week rather than the full 5 days,” says Glascott.


Where from here?

“I think the fact that Australia, to-date, has managed COVID much better than most other parts of the world is extremely positive. Non-health factors that could assist the market include HomeBuilder which has already been announced and the much-discussed stamp duty reform,” say Kusher. 

Glascott’s final message is positive. “Interest rates remain very low and the banks are lending, so if you have secure employment you are in quite a good situation to buy at the moment.”