Property Market Insights: COVID, Toilet Paper & Real Estate Trends
(NOTE: For the most current information, this blog post was updated in early April.
Read the updated article here.)
The property market has been significantly affected by COVID-19. From changes in supply and demand to shifts in buyer behaviour, the real estate market is navigating uncertain times. As a result, understanding these trends is crucial for anyone considering buying or investing in real estate.
Disclaimer: I’m not a medical expert and won’t attempt predictions about the pandemic. Instead, I’ll focus on property market insights based on real data and experience.
Many have asked me for an update on the property market. Below are my observations based on client experiences, conversations with REBAA executives, and feedback from sales agents across Australia.
Before buying, ask yourself:
- Supply and demand – how are buyers and sellers behaving?
- Interest rates – what impact will cuts have on the property market?
- Government stimulus – how might this influence real estate trends?
- Which areas may gain or lose value during uncertain times?
Recent Market Wrap
Regional and coastal property markets have remained strong. Indeed, homes often sell quickly, sometimes above asking price. Limited stock levels mean competition is fierce, and “bargains” are rare. Therefore, buyers must act decisively when opportunities arise.
Low supply supports property prices, while demand for quality homes remains high. Inferior properties may see price adjustments, but well-priced homes continue to attract buyers immediately.
Buyers must act decisively. Waiting for prices to drop rarely works, especially in a market with low inventory.
Buyer Behaviour in the Property Market
Homebuyers are hungry for quality properties. Consequently, knowing zoning, easements, council rules, and restrictions is essential. Good homes remain in high demand and sell fast.
Investors are cautious. Positive cashflow properties in regional areas (4-6% rent returns) are outperforming low-yield city houses. Moreover, some cash-only investors are targeting homes that offer stable returns for retirement or semi-retirement planning.
Some buyers have paused activity, but decisive buyers are filling the gap, keeping demand high.
Interest Rates & Property Market Impact
Interest rates have hit record lows, and the RBA has announced Quantitative Easing. Consequently, low finance costs typically increase property demand, which could boost market prices over the next few years. For more info,
read this article.
Property Market Predictions
Stocks are volatile, and passive income from banks is low. Therefore, property remains a reliable asset for long-term growth. Gold and shares can be risky without precise timing.
Certain properties and suburbs may see short-term dips, but overall, housing demand remains strong. Reduced developer activity will lower supply, supporting prices in the medium term.
Buying a Home
Homes are still being bought. Premium properties above $2M are more affected by market shifts, while affordable homes remain resilient. Multi-income properties, duplexes, and flats in lower-priced areas are in high demand.
For those leaving cities for regional or coastal areas, demand is growing. Affordable coastal locations with limited supply should perform well.
Investing: Where and Where Not
Avoid areas dependent on international tourism or large events. Instead, focus on regions with internal migration trends, natural attractions, and stable jobs in health, government, and infrastructure. Towns with committed infrastructure projects offer stable property market opportunities.
Local tourism may also benefit from Australians choosing domestic travel, giving investors flexibility with short- or long-term tenants.
Big Picture: The Property Market Outlook
COVID-19 impacts will affect the property market, but government stimulus and low interest rates provide upward support. Although markets may be uneven, opportunities exist for informed buyers and investors.
For guidance on buying, selling, or holding, we offer support calls and in-depth reviews.
