COVID-19 has already had an impact on the property market with social distancing, falling consumer confidence and uncertainty all having their role to play.
However, we have many buyers and sellers who are still keen to buy or sell property, so for us it’s very much business as usual, with just a few changes in the way we operate.
The facts about the property market
Corelogic data shows that 2020 got off to a good start for Sydney property. House prices were up 4.6% in the three months to February 2020 and 10.9% over the previous 12 months.
At the end of March 2020, the median house price in Alexandria was $1,550,000 and the median unit price was $715,000, according to realestate.com.au.
In Erskineville, the median house price was $1,450,000 and the median unit price was $899,000.
But March was a month of two halves. Midway through the month, Sydney’s auction clearance rate was 74.6%. By the end of the month, it had fallen 66.2%. Nation-wide, the capital city clearance rate fell from 70.6% in mid-March to 37.3% by the end of the month.
Changes to the rules around auctions certainly contributed to this decline, with some vendors and agents pulling properties off the market or cancelling auctions as the situation unfolded.
There’s no doubt that job losses and the general uncertainty around COVID-19 have reduced market confidence and also contributed to a wait and see attitude among buyers and sellers alike.
But they have also actually hastened some activity, with many properties selling pre-auction or off-market in the weeks leading up to the Easter break.
In fact, Corelogic data shows that the weekend before Easter, 84% of properties listed as sold by auction, actually sold prior to the event, which must be something of a record.
How social distancing is impacting the inner-city property market
Under the government’s new regulations, it is still possible to buy, sell, rent, invest and move house. But the new social distancing rules mean that the real estate sector, like other people-focused industries, has had to undergo some practical changes.
We can no longer run public auctions in person, either on-site or in auction rooms. Instead, we must now rely on using technology to run virtual online auctions. We’re also selling more properties by private treaty than we usually would, as well as taking more ‘expressions of interest’.
We’re still running open homes. However, we can only now conduct these by private appointment. To protect the health of buyers, sellers and ourselves we’re also only allowed to take one person through the property at a time.
These restrictions make it more important than ever for sellers to pay attention to the quality of their marketing materials. Photos, videos and copy must all be top-notch to make sure your property stands out from the crowd and ensures prospective buyers notice it and then find out as much as they need before inspecting.
We think a good example of how to do this is 34 Burren Street, a quintessential north-facing, freestanding three-bedroom Erskineville terrace house in a leafy cul-de-sac.
We’ve scheduled a virtual auction for this great property on 2 May 2020, and prospective buyers can watch a video tour before or make a private appointment to view the property through realestate.com.au or domain.com.au.
The future of the inner-city property market
Naturally, the uncertainty COVID-19 is creating is reducing activity in Sydney’s inner-city property market. However, we haven’t yet seen any drastic price falls.
In fact, the sale prices we’ve achieved so far in April have been excellent. On 18 April we auctioned a brand new architect designed 4 bedroom home at 6 Phillips Street Alexandria. The online auction resulted in a sale of $2,585,000 with 5 registered bidders. Many properties we have listed have sold pre-auction and we have buyers on our books looking to make a move when the right property comes up.
It’s a fact that there are fewer buyers wanting to make a move right now and fewer properties on offer right now. But this means the buyers we do have are serious, committed and genuine. It also means lower stock levels may act as a buffer against potential price falls, as they help reduce any gap between supply and demand.
It’s difficult to predict how the next months will unfold, given that so little is known about the virus. However, we believe that once certainty returns to the market and the COVID-19 crisis resolves, we’ll see activity take off again in Sydney’s inner-city property market.
Looking to buy or sell property in Sydney’s inner-city?
Get in touch with me today to find a property to suit your needs.