The Impact of COVID-19 On The Housing Market

    With the pandemic encroaching on every industry, wreaking havoc on the economy as it goes, the Australian property market too, has come under scrutiny.

    Predictions have been made, stating a drop in prices and value over the span of the next few months and potentially years. However, it appears Melbourne’s property-centric market has held its value — perhaps we can cheekily attribute it to the fact that we’ve been winning ‘Most Liveable City’ for a few years now (leaving Sydney fairly behind in the dust now). The tight-knit community built within Melbourne fosters a sense of belonging, and often, once people move into a suburb of their choosing, they rarely ever leave.

    While acknowledging that the pandemic has done some damage, founders of William Huxley, Craig Nichol and Alex Morgan believe that the property market won’t just go back to normal, it’ll see a boost in transactions when lockdown is lifted. The duo weighs in on the current state of the housing market below:

    Would this be a good time to buy or sell property in Melbourne?

    CN: With current Stage 4 restrictions in place, it’s pretty complicated. People understandably like to inspect houses prior to purchasing them, which isn’t possible right now. Virtual tours aren’t quite the same when you’re planning to make a big decision on a home so that makes the market a lot tougher. However, with Stage 3 restrictions, the market was still fairly strong. There were quite a few good prices being achieved before Stage 4 hit. In fact, it’s why we’re expecting a bit of a burst once the restrictions are let up. We’re looking at making up over six weeks worth of business in the span of a week or so, as a lot of people have been held back by Stage 4. I’m not saying we’ll see massive growth straight away because people might still be a bit cautious but there will definitely be a spike in transactions. Most of the north-side of town will be pretty strong — sought-after properties in the inner and middle-ring suburbs will stay strong markets.

    Do you think people will be moving out of the city and to the country if they’re looking to buy? More so, now that working from home has become a thing?

    CN: I’m not a believer that people are going to move down to the country purely because they can now work from home. Even if the need to go to work has been removed, the metropolitan areas come with so many other benefits. I think that if people are now wanting to move into the Country from the City, it is not purely because they can work from home, I think there are plenty of other reasons.

    AM: A majority of the market is actually led by lifestyle decisions — it’s schooling, families, friends — all key factors to take into account when moving house. If you’ve spent a few years in a suburb and have kids, it’s highly unlikely that you’ll uproot them. Especially if you’re located amongst friends and family, or have a strong community. Most people in Melbourne will always choose to be around good public transport, good schooling and good shops. And of course, good cafes!

    CN: Yeah, and that’s why Melbourne has had the strongest population growth in Australia, it is a highly desirable location for its lifestyle offerings. If you move into the Country because you can work from home, you will be missing out on a lot more than just the plethora of eateries on your way to work. Yes, there will be articles that focus on a minor population moving as it always has, but if you’re looking for an overall statistic and the hard truth, remote work isn’t affecting moves any more now than it was before… and moving to the country and regional areas can be an amazing change to make, but it was before Covid-19…people have been working from home for a long time.

    Has COVID-19 caused any other changes within the housing market?

    I think COVID has also highlighted how stable as an asset, property is. For example, the areas we’re working in, house prices have barely moved. It’s been stable and the current price growth or price declines you see in the media are not a true reflection of the market.

    AM: Well, it’s definitely changed things semi-permanently. For example, transactions have definitely changed for the industry. Signing a contract over your phone or computer hasn’t been a new thing for us at William Huxley but a lot of other people have definitely been thrown into it. Online auctions were also something we were already doing, but now it’s really evolved into something people value — I feel like every auction in the future will be online. Even leasing has changed in a big way, every property manager’s worst nightmare was tenants moving into a property without actually physically viewing it. There would always be complaints as it may look quite different to how they imagined it. But now with virtual tours or online videos that’s changed for the better. We’ve leased 5 properties this week through this process, in the midst of lockdown. It’s just this massive digital shift that the industry quickly adapted to and was forced to catch up with.

    CN: I think COVID has also highlighted how stable as an asset, property is. For example, the areas we’re working in, house prices have barely moved. It’s been stable and the current price growth or price declines you see in the media are not a true reflection of the market. You are only seeing very low volumes of certain types of properties that for whatever reason have to be on the market to find a buyer, whilst the owners of blue-chip real estate are just sitting and waiting, there’s no pressure, they have lived there for 30-40 years and have no debt — but once the market is in a better position post COVID, we’ll see a bounce in the market. We saw a bit of that right when restrictions were first lowered. Buyers need homes to live in, kids need to be near schools, people want to live their lives and the cycle of supply and demand keeps moving – and at the moment there is very little supply.

    If there’s one thing that everyone can agree on through lockdown, is the importance of having a great home you love. We’ve all been spending a good deal of time indoors and having a space you can call safe and ‘home’ is essential for an individual’s wellbeing. There’s an understanding that it isn’t just a house; it’s your home. We’re here to make that happen for our clients, by catering to their tailored needs and giving our clients the attention they deserve. From leasing, selling, and buying, to property management and building strong relationships with our clients, tenants, and owners — we’ve helped people find their dream properties, for four years running.

    Although we are all currently going through some tough times, it’s given us all a renewed appreciation for our family and friends — whom we’ve often taken for granted. Until we’re back up and running, we hope that you stay safe and enjoy the time we have now, to spend with family. Your home is your sanctuary, but if you’re looking for an upgrade or have found through some good ol’ lockdown reflection that your lifestyle needs a new home that compliments it, we’d be happy to help.