There has been much talk about these ‘unprecedented’ times. As a word, it is getting an unprecedented amount of coverage. So, we will just refer to the period of Autumn 2020 as ‘unusual’.
In April and May, life in the world of real estate (and everywhere else) was unusual. But you will be pleased to know that things are now settling down.
So, what did unusual look like? Well throughout the whole lockdown period we continued to receive enquiries for property. And we also continued to achieve sales throughout this period as well. Admittedly, these sales were for properties that were already on the market rather than new listings, but it is important to state that while Australia went into isolation, the property market did not. Typically, we were dealing with people that were serious about buying or selling, with speculators light on the ground during this time.
There was a four-week window where we couldn’t offer open houses. Once that concluded, we were pleasantly surprised at the numbers of people coming through. In fact, numbers were what we would normally see, outside of COVID-19.
We have all read the stories about a predicted downturn in the property market. Some have predicted as high as a 30 per cent drop. Others are leaning towards a more modest reduction. We do expect that there will be an adjustment, but it will be nothing like the worst-case scenarios being painted by more sensationalist media commentators.
And without the benefit of a crystal ball, can anyone really know? There are many post-isolation factors still to be played out. The market is directly affected by job security, so the timing of the conclusion of the job keeper allowance will likely have an impact. Our Treasurer has signaled that Australia is now in a recession, but the extent of the recession will not be apparent until data from the June quarter comes to light. And meanwhile, it appears that other world economies are in significantly worse shape – so maybe we are the lucky country after all?
But we need to be realistic about prices and acknowledge that a downturn is likely. Premium house prices can only be achieved in a market with strong demand and short supply. And today’s north coast property market is characterised by weakening demand and a moderate growth in supply. Which is a complete flip on what we experienced just a few short months ago at the beginning of 2020.
The key take home messages are that yes, things are moving more slowly than before, but if a property is priced correctly, it will sell. And if you are sitting on the sidelines waiting for a bargain, you might be waiting a while.
Demand for property remains relatively strong considering the overall environment, but it now comes with some strings attached, with purchasers keeping one eye on the horizon to see if any of the doomsday predictions are coming through. Meanwhile, supply has weakened with many potential sellers currently sitting on the fence and waiting to see which way the market will move. Right now, if you don’t have to sell then there is no incentive to sell. However, it’s inevitable that the market will adjust, and supply will catch up as time goes on. Time does not wait! There are always people who need to buy and sell regardless of outside factors: people need to sell as their work location changes; retirees downsize; families upsize as their numbers grow; and there’s no shortage of young couples moving into the market.
People move to our region for a reason. It is rarely for a local job. Often, they are downsizers or sea changers looking primarily for lifestyle. We also predict a second wave of big city migration to our region, as city dwellers who have been working from home make the connection that a work from home arrangement is a viable way to earn a crust, and that relocating to a cheaper ‘lifestyle’ region with access to broadband, good schools and airports might just make for a better life. In tandem with this, people may also make the connection that living in low density housing means more personal space and better access to the great outdoors should we experience a pandemic second wave.
Within our region, demand remains steady for properties in Lennox Village and East Ballina, followed by Ballina Island. We are still seeing sales above $1M, with demand for both high and low ends of the market relatively equal. The median price in Lennox is now over $1M. Houses are more in demand than units. Properties in the $500,000 – $800,000 price bracket are selling relatively well, as are properties in $1M – $1.2M bracket.
If you are thinking of selling but have been sitting on the fence; now may be a better time than later to jump in as you will be ahead of the inevitable catch up period.