Despite this unusual and unprecedented time, we have found that there are still qualified purchasers around.
The good news is that since the beginning of June we have experienced renewed interest in sales and rentals. As a consequence, we have continued to negotiate sales, and often for prices exceeding expectations.
With open-houses and on-site auctions again able to be held, we are hopeful that our neighbourhood will continue to defy the negativity that is being experienced in some other areas.
As an example of what is occurring in other localities, we currently have a one- bedroom unit available for rent in St Leonards.
It is within what has been a very popular complex and over the past 10 years we have generally leased it within a week of it becoming available.
We listed it in early April and although it has had quite a few ‘views’ and ‘engagements’ on internet sites, and the owner has reduced the price considerably and installed new carpet, we have been unable to source a suitable tenant.
This block currently has TEN one-bedroom (or one-bedroom plus study) units available which is an amazing contrast to previous times.
Our expectations
By and large forecasting is difficult.
One moment we are hearing prospects of a mega collapse of our economy and the next moment things are brighter than expected.
What we can tell you is that there are some localities where properties have sold for as much as 25% above the reserve while in other areas it has been really difficult to achieve a sale.
I’m expecting our area to be relatively insulated from significant movements. There is some thought that after a short term drop in prices a strong rebound could occur.
Property values hold up well despite the market slow-down – interesting forecasts on what is ahead!
Property values during the COVID- 19 pandemic have held up well despite a dramatic slow-down in sales activity.
According to property market analysts, CoreLogic, one of the reasons for the market stability has been the significant decline in the number of properties coming onto the market.
The number of new listings being added to the market was 35% lower at the end of April relative to the same time a year ago and 43% below the five-year average.
Property values tend to fall when there is a surplus of properties on the market. The reduction in advertised stock levels at a time of low demand is believed to be insulating housing values from a downturn.
Estimates of settled sales were about 40% less in April.
Most regions across Australia recorded a rise in home values through April, though the monthly pace of growth more than halved, dropping from 0.7% in March to 0.3%.
But what is forecast?
The sharpest reversal in growth conditions hedonic index’ has shown that the growth was in Melbourne, (- 0.3%) while in value of the top quartile (the highest Sydney values remained positive, (+ 0.4%).
By contrast, the six months before March saw both cities averaging a monthly growth rate around 1.7%.
Interestingly, CoreLogic’s ‘stratified value sector) of the housing market has weakened the most, whereas the ‘broad middle’ of the market has been the strongest. Sydney’s top quartile had 0.3% rise compared to the middle sector’s rise in value of 0.6%.
In contrast to what has happened to date, the Commonwealth ‘The fall in property prices would be significantly smaller than Bank is forecasting that the Coronavirus will have ‘profound our central scenario, particularly given the extraordinary low short-term consequences’ for the market. borrowing rates currently on offer’.
It expects prices to fall 10%-30% nationally, with Sydney and Melbourne to be among the worst-affected.
After the fall, it expects some stability returning to the market as interest rates remain at record lows.
The Bank has hedged its bets somewhat as it has said that in a best case scenario government restrictions on economic activity could start to be lifted by the end of May and as a result…
Land value expert, Catherine Cashmore, has forecast a drop in house prices, when the effects of the lockdown filter into the numbers, but not a crash.
She is telling her clients to prepare for a strong rebound which could throw up some ‘wonderful opportunities’ for real estate buyers, investors and developers.