History gives some good indicators around how the lockdown will impact activity, says expert
Late on Saturday afternoon, Sydneysiders were told that from 6pm, they would be in lockdown for two weeks following the exponential growth of the Bondi cluster to 110 cases. On the same weekend, buyer’s agent and author of Positively Geared Lloyd Edge received more enquiries from purchasers than he had over the preceding three weekends. Yet, he told MPA that the Sydney lockdown would not likely impact the property market at all.
“I actually think the market’s going to go ahead with a lot of strength,” he said. “When we went into lockdown, I actually had a lot of new clients come in.”
When COVID first hit, there was a lot of talk in the media that prices could fall by as much as 40%. The past year has proven those predictions wrong, with property prices across the country increasing at the highest quarterly rate in a decade during the March quarter alone.
According to Edge, just because buyers are stuck at home, this doesn’t mean they are twiddling their thumbs. He believes the lockdown will give people even more time to research property purchases online.
“There has been talk for a couple of weeks that some of these auctions might go online because people could see that it was heading that way,” he said. “Inspections are very limited - you’re only allowed to have one agent and then a buyer going through the property at any one time.
“What we’ve seen from last year is that (social restrictions) actually doesn’t deter anyone from buying a property. I actually think, if anything, there will be more people putting in offers for property sight unseen, because there’s still FOMO in the markets.”
While buyer’s agents are still allowed to walk through a property with a selling agent, the general public will need to inspect properties through video call under the current restrictions, he said.
When the lockdown ends on July 09, Edge expects market activity will continue to be strong – with the potential for even more attendance at open homes as those who were “waiting to see” come back into action.
“That just creates more buyers and that can potentially create a bit of a bidding frenzy at auctions or when you’re putting offers on properties,” he said.
If the lockdown ends up going longer than two weeks, he believes that online auction activity will continue with good attendance – however, not being able to physically attend inspections could mean fewer owner-occupiers in the market and more investors ready to step in instead.
“Often investors buy properties just looking at the numbers more than being emotional about it, so they might be happy to look at a video about it and put in an offer,” he said.