Greetings from Scoutable and welcome to our March Wrap Up.
First and foremost, I hope this finds you healthy and safe during these difficult circumstances. The last month has been tough for so many people. Things are moving and changing quickly - if you have any property related questions (or just want to chat), please give me a call or send through an email.
If you are like me, then you are getting more than your normal dose of news. I’m sure everyone is up to date with what is happening across the globe with COVID-19. As governments react to the threat it poses to our health, ways of life and the global economy, it is having a direct impact on the way the property market operates. Currently, the Federal government has imposed the following rules: -
No on-site / in-room auctions
No open home inspections allowed
However, online auctions, private inspections and in-person negotiations are permitted
The NSW Government announced overnight that we all must stay home except when utilising essential services. The NSW Government published this morning, reasonable excuses for being out of the house. The points below relate to the real estate industry:
Travelling for the purposes of work if the person cannot work from home
Moving to a new place of residence (including a business relocating) or between different places of residence or inspecting a potential new residence
Undertaking any legal obligation (this includes property settlements)
This means the property market is still operating, albeit slightly differently. Many real estate agencies have decided to sell properties via private treaty only, meaning no online auctions. As such, monitoring the auction clearance rates isn’t necessarily going to provide a meaningful outlook on the condition of the market (40% of properties scheduled for auction last weekend were pulled). I will be able to provide a more comprehensive update on the market at the end of April.
Currently, we are seeing mixed results in the market place. Some properties are trading 5-10% under market values from the beginning of 2020, whilst other properties are performing well. Overall, house prices are remaining somewhat stable, which is driven by interest rates at historical all-time lows. Owner-occupiers (with stable employment) are seizing the opportunity to buy without as much competition (given the reduced amount of buyers) and investors are more likely to invest in property than shares as the impact of COVID-19 is felt on the stock market.
Many clients are asking if it is the right time to buy. I am always commenting that property is a long term investment. The property market does have short term movements. COVID-19 is something that none of us have ever experienced (and hopefully never will again) but it will pass and life will return to normal. For the buyers who have stable employment, there are good deals out there, especially in the off market platform. But what if the market falls further? No one can answer that question with certainly. It might. It is hard to say what will happen in three to six months’ time. We may find a substantial drop in new listings as vendors wait for things to return to normal. This will reduce options for buyers, which could increase competition for what little stock is available. If the market did fall further, you should make up any shortfall over the lifetime of the investment. The interesting element of picking the bottom of the market to buy is that no one knows it is the bottom until prices start to increase. The important questions to ask yourself are..... Is this the right property for me? Is the financial commitment manageable? If yes, then go forth and find that great opportunity (or let us do it for you). If you are feeling unsure, then wait.
If you are thinking of buying or investing in Australian property, get in touch to learn about Scoutable's services and how we can assist with your property search.
Until next month,
Kellie Landrey | Principal Buyers Agent
IN THE NEWS
PROPERTY MARKET WEAKENS AMID CORONAVIRUS AUCTION BAN
https://www.abc.net.au/news/2020-03-30/property-market-weakens-amid-coronavirus-auction-ban/12101822
NATIONAL CABINET TO CONSIDER COMMERCIAL AND RESIDENTIAL TENANCIES ON APRIL 3RD
https://www.propertyobserver.com.au/forward-planning/investment-strategy/property-news-and-insights/112109-the-national-cabinet-to-consider-commercial-and-residential-tenancies-on-april-3.html
BRISBANE BUYERS UNFAZED BY ONLINE AUCTION
https://www.domain.com.au/news/brisbane-buyers-unfazed-by-virtual-auctions-fighting-it-out-online-for-property-945134/
PROPERTY OF THE MONTH
20/1-7 BORONIA STREET, REDFERN
Redfern is located 3km south-east of Sydney’s CBD. Redfern is a growing hot-spot for investors and owner-occupiers alike for its access to the CBD, public transport, retail amenities and public facilities - such as parklands, tennis courts and Prince Alfred Park’s popular outdoor swimming pool. The property of the month is 20/1-7 Boronia Street, Redfern. The three storey complex (no lift), consists of 24 apartments and 20 townhouses, built in the 1990s. The 74sqm apartment is situated on the top floor, comprising two bedrooms, one bathroom, open plan living / dining / kitchen, laundry, balcony, and provides a single lock up garage. The apartment faces east, overlooking the common gardens. The property is 700m from Surry Hills light rail station or 1km (15 minute walk) from Central station. The price guide is $900,000. The vendor's price expectation was over $1,000,000 but it has since reduced to be more in line with the current market. The rental guide is $650 per week. The outgoings are low for a property of this age and location, with strata fees of $2,900 per annum. This property would appeal to both investors and owner occupiers with above average potential for capital growth.
If you'd like to know more about this property or any others, please get in touch.
