It’s been an uncertain few months in the Australian property market and if you were planning on selling your property in 2020, you may now be asking “should I sell my house now?” or wait?
Whether or not you choose to sell straight away will depend on a multitude of different factors, from current market conditions to the urgency of your own personal circumstances.
Let’s explore the current real estate climate and the pros and cons of waiting it out or selling now.
The current state of the Australian property market
Our property market update for June 2020 indicates that while values have generally fallen, according to Tim Lawless, CoreLogic’s Head of Research, these falls have remained 'mild to date.' For the month of June, national housing values fell 0.7%.
The general consensus from the real estate industry, economists and analysts as a whole is that the housing market, throughout the Covid-19 pandemic, has remained relatively resilient.
This resilience has protected home values from more significant declines. The factors that are cushioning home prices from a recessional blow include: ongoing low levels of advertised stock, significant government stimulus, low interest rates, and forbearance policies from lenders that have played a part in keeping urgent sales off the market.
While it is important to understand the general ebbs and flows of the real estate market, it’s also important to understand that each market and individual property will perform differently. For example, in June, while Sydney overall experienced a small decline in housing values, regional NSW on the other hand posted an increase of +0.3%.
Whether you are impacted by falls in dwelling values depends on a variety of factors such as location, property type and whether your property falls into the higher or lower end of the market. So while some dwellings may have experienced declines, others may have actually increased in value during this time, so if you are seriously considering selling your home, it’s important to speak to local agents and research your local market to look at the facts, rather than generic catch-all headlines.
State-by-State Covid-19 real estate restrictions:
New South Wales
From 9 May 2020, the NSW Treasurer announced that open home inspections and on-site auctions can return after a 6 week ban. According to NSW Health Minister Brad Hazzard, while Australians have done an incredible job to help flatten the curve, social distancing and strict hygiene practices still must be adhered to.
“Real estate agents should limit the number of people viewing a property and attending an auction, follow stringent cleaning and safety guidelines, ensure clients do not touch surfaces and always have hand sanitiser," he said.
Practically that means:
- Physical distancing of 1.5m
- Good hygiene within open homes and at auctions
- Anyone experiencing symptoms will not be allowed to enter the property
The Western Australian government has moved to phase four on their recovery roadmap. Previously, gatherings of more than two were banned, which meant that properties could only be shown privately.
Fast-forward to now and the only restriction on gatherings is a one person per 2sqm rule. It is also expected that if cases remain controlled and low, then the government will move to phase five on their recovery roadmap on the 18th of July.
From May 1 2020, open home inspections and real estate auctions are allowed to be conducted. These easing of restrictions is stage 1 of the Northern Territory Government’s 3 step “roadmap to the new normal”.
From May 1 2020, the Queensland Government announced that 6 people are now allowed at open house inspections including the real estate agent with no more than one person per four square metres.
From July 3, real estate restrictions were relaxed. This means that auctions and open inspections can have attended of up to 50 people, so long as there is no more than one person in a 2sqm space.
At open homes and auctions, the following precautions and procedures should take place:
- Strict sanitary standards including hand sanitiser and gloves where appropriate
- Social distancing
- Collecting the details of attendees so that in the event of an outbreak, individuals can be notified
Unfortunately Victoria has taken a bit of a turn, from August 2nd Metro Melbourne has moved to Stage 4 lockdowns, and regional Victoria is also moving to Stage 3.
As we currently understand, private inspections in Melbourne are now banned. Auctions will continue to operate online, and inspections moving forward will can only be conducted virtually. The waters are still a little muddy, so we are working closely with relevant industry bodies to get more clarification around what is and isn't allowed.
If you are in regional Victoria and selling a home, not that much has changed. Private inspections (one-on-one) can still take place, which means there isn't any further disruption to the home selling process than what is currently out there.
For more up to date information and answers to other common questions, check out our FAQs around Covid and Victorian real estate. If there's something you're not sure of, you can also submit your questions here for us to answer and publish.
Despite this blow, agents and the wider industry are still optimistic about the future of Victorian real estate, approaching the return of restrictions with confidence that sellers, buyers and agents will pull through, and that housing values will remain resilient.
Australian Capital Territory
The ACT Government re-introduced open homes and in-person auctions from the 8th of May, with a maximum of ten people in attendance.
From the 11th of May, live auctions and open inspections can go ahead, with a limit of one person per 4sqm and a maximum of 75 attendees on-site at any time. Real estate agents are excluded from this number.
Agents must take a record of all attendees attending auctions or open homes, so if there is an outbreak, contact tracing can take place.
Auctions and open homes may go ahead, with a maximum of ten people in attendance at any one time. Attendee contact details must be taken down so they can be contacted if an open home or auction is linked to an outbreak.
2020 Australian property market forecast
With circumstances changing daily, it is difficult to predict what will happen in the property market for the remainder of 2020.
However, from what we can see, the impact of Covid-19 on the Australian housing market has been milder than initially anticipated with a fall of just 1.3 per cent in capital city dwelling values over the past two months.
Significant government stimulus, mortgage repayment holidays, low stock on the market and continual easing of social distancing measures have all worked together to help insulate from any large price drops. According to the RBA governor, the current trajectory of the Australian economy is somewhere between the best case scenario and the central case scenario.
In terms of property values, Mr Lawless states that “the magnitude of housing values falls depends on a broad range of factors with most hinging on the timing and extent of social distancing policies being lifted.” So far, however, values have been relatively insulated.
The coming months will provide more clarity on the direction of the housing market and one of the most important indicators for the property market is consumer sentiment. The outbreak in Victoria is a reminder that the risk of return of tough restrictions is a real possibility.
In all other states, however, cases have remained low, and as a result, restrictions have been eased, and consumer confidence is rising.
Should I sell my house now or wait it out?
Are you still asking yourself, “Should I sell my house now or wait?”. It’s a huge decision and in the current climate, deserves all your careful consideration weighing up the advantages and disadvantages for each.
To help you with your decision making, we’ve put together a list of key factors to consider. Let’s take a look at the pros and cons of waiting or selling now:
There are many different reasons why you might be looking to sell now. Although the current climate may be uncertain, it is important to remember that the market doesn’t stop. There will always be properties going to market and buyers out there wanting to buy.
Here are some of the pros to selling now:
Agents are still seeing great results. Real estate agencies are still running and agents around the country are still reporting great sales above reserve prices. Sellers are also reporting excellent results, with four vendors we spoke to all selling in under 10 days, and recieving multiple offers.
The buyers are genuine. There may be less buyers on the market at the moment but the ones that are currently looking for properties are genuine and pre-qualified. Buyers are also incentivised to purchase now in order to take advantage of the low interest rates and looming pre-approvals expiring.
Prices are holding steady. So far, we haven’t seen much drop in property value yet. Since the future is uncertain, it may be worth thinking about going to market now. Agent Andrew Milne from O’Brien Real Estate finds that prices are holding. “I know we are in uncharted territory, but from a residential real estate perspective, things are moving along quite well”.
Real estate restrictions have eased in most states. Easing of real estate restrictions is good news for the industry as processes return to a new normal. Easing of restrictions have had a positive flow through to consumer sentiment. For the States where restrictions are still in place, agencies have successfully utilised new processes and technologies in order to make every part of the selling process possible online.
There may be an oversupply of property come spring. The fact that many are currently waiting it out could mean that there may be an oversupply later in the year as sellers rush to market. President of the Real Estate Institute of Victoria is already predicting that a big spring for the Victorian real estate market.
“There will certainly be vendors looking to put their property on the market for the spring campaigns, and they’ll start to make those necessary preparations in the coming weeks,” she said.
Waiting for later
On the flip side, here are some reasons it might be better to wait before you sell:
There is too much uncertainty. At the moment, no one knows what impact Coronavirus will have on the property market. If you don’t need to sell now, it might be a good idea to wait for things to settle to get a clearer idea of the situation.
There are less buyers on the market. Uncertainty in job security will mean that there will be more potential buyers sitting on the sidelines.
If you don’t feel comfortable selling your property remotely. Some states still have not eased restrictions on open homes and auctions. Conducting the entire sale process remotely is a new process and will take some time to accept and adapt.
Remember, that Australia does not have “one” housing market and during these conditions, different areas will be affected differently.
If you need to sell your house during this time, it is more important than ever to find an experienced real estate agent with a good strategy in place. If you are unsure where to start and need help finding the right agent to sell your property in these market conditions, we can help.
Australia does not have “one” housing market and during these conditions, different areas will be affected differently.
Helpful tip: When talking to agents, it may be worthwhile to ask agents you are considering how large their database is, and if they have buyers looking for properties like yours. Larger databases will be beneficial in this market as there is less “in-person” buyer demand.
If it is not essential for you to sell your home during this time, it may be a better option to sit and wait until things become clearer.
If you’re unsure and still questioning if you should sell your home now or wait, the best course of action is to speak to a real estate agent in your area to understand conditions in your local market before you make any quick decisions.