AUS property v COVID Part 1

Well . .what a difference a day makes in the world right now. Information we would normally have followed closely . .like the stock market's biggest falls . . now doesn't command top headlines.

These days it's all about the COVID-19. This week the reality of what we should have done weeks ago is finally hitting home.

With stats about how Singapore, Hong Kong and Taiwan have successfully 'lowered the curve' (a term we have become very familiar with), State and Federal governments are acting to simultaneously get in front of the virus spread while flushing the economy with cash.
COVID-19 impact on AUS property market . .so far
To date the property market is showing very little reaction to the unfolding events. At the opens and auctions last weekend (14 March) there was absolutely no difference in attendance. And that was after large share market dips right up to Friday and the 'pandemic' announcement on 11 March. In the queue for opens, every first time buyer I spoke to was excited about the fact the share market + virus might scare other buyers off. 
By the time I made it to the higher end ($1M+) purchases, the queues were bigger. One property which appealed to hybrid buyers (investors + up-sizers) had more than 50 groups in attendance. Yes . . bait pricing was in action but the crowds were still there. 
From a negotiation perspective, we have found vendors (owners) a little more flexible to deal with but there's always the group who stubbornly say they will just pull their property from the market if they don't get their price.
The message from both sides of the fence last weekend was " . . this is short term and my property activities are long term". I didn't see one mask . . .but I also consciously thought to stay a little further away from everyone, no one shook hands (though I don't usually shake hands at opens) and I didn't touch anything . .once again I never normally would.

Below is the latest in summary of 'Asking Prices' as compiled by SQM Research.
Market sentiment
I'm expecting we will see changes on the ground this weekend but, as we specialise in providing services to buyers, I'm in the box seat to give you a transparent view of current buyer sentiment and – to date – buyers who are confident in keeping their jobs are not backing down.
Remember it takes approximately three to six months to prepare to purchase, and the buyers who obtained their approvals in the past few months are extremely motivated because the property market was scorching hot due to pent up demand after the Federal election in May 2019.

Those buyers are now getting a sense they may literally have the opportunity of a lifetime to access some bargains . .not to prey on unfortunate vendors, but to deal with vendors who will be reasonable as opposed to sellers who were constantly increasing their sales prices. 
Bargains anyone?
To answer the question I'm currently being asked the most right now . .will there be bargains? There definitely will be. The critical point to remember though is that we're still dealing with a two speed market and the gap is just about to become cavernously wide.

This means there will be discounts and deals for new properties / off the plan / recent builds and generally 'bad' stock. The downside of the COVID-19 impact will be vendors with good quality properties who will withdraw their plans for sale, further decreasing the pool of good purchases.

The opportunity for buyers will be there, but you will need to take a very technical approach and select properties that will perform well in the current environment, as well as have an upside for you in the future.

Remember – no matter what the market is doing, ensure you purchase the best property for your needs, and what's best for others won't be what's best for you. If you would like to book in for a strategy session to plan your next purchase or review your existing portfolio, email me at [email protected]


Author: Debra Beck-Mewing


Debra Beck-Mewing is the Founder and CEO of The Property Frontline.  She has more than 20 years' experience in property investing, Australia-wide and has used a range of strategies to build her property portfolio including renovating, granny flats, sub-division and development. Debra is skilled in identifying development opportunities, and sourcing properties that have multiple uses and multiple exit strategies.  She is a Qualified Property Investment Advisor, licensed real estate agent and also holds a Bachelor of Commerce and Master of Business. As a passionate advocate for increasing transparency in the property and wealth industries, Debra is a popular speaker on these topics.  She is also an author, podcast host, Editor in Chief of Property Portfolio Magazine and participates on numerous committees including the Property Owners' Association.

Follow us on facebook.com/ThePropertyFrontline for regular updates, or book in for a strategy session to discuss your property questions.

Disclaimer – This information is of a general nature only and does not constitute professional advice.  We strongly recommend you seek your own professional advice in relation to your particular circumstances.
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