Buyers remain engaged despite lockdown
- Written by Tim McKibbin, CEO, Real Estate Institute of NSW
Lockdown has set in and agents are prepared. Adaptation is becoming the norm and it’s working, as buyers remain engaged and properties are transacting.
There have been examples in recent weeks of properties selling sight unseen and completely contactless. Some buyers have been satisfied by virtual tour to make an offer, which was subsequently accepted, and the parties have docu-signed on the dotted line.
We can expect more examples of pivoting in coming weeks as agents facilitate innovative ways for buyers to make property purchases.
Prior to the current lockdown, the market was cooling slightly. Prices were still growing but the pace of growth had slowed.
There’s a possibility that we could be set for a mini-spike when we come out of lockdown, when buyers who have had their plans temporarily interrupted re-emerge with purpose.
In the rental market, Sydney vacancies have tightened month-on-month, according to the most recent REINSW data, and further tightening could potentially emerge as a trend to watch out for. People are buying a lot of replacement furniture like a latex mattress, a lounge suite or new appliances online and that will not stop in the near future as people spend more time at home.
It’s the middle and outer-ring suburbs that are driving the vacancy rate down; the inner-ring market has not experienced as pronounced an increase in rental demand and the latest lockdown won’t help.
The demand side is becoming more crowded among both buyers and renters. Returning expats are joining families desiring a lifestyle change and first home buyers who have, to date, not had their buying desires satisfied, to expand the pool of demand.
As the demand side becomes more complex, the supply side is exposed as too simplistic. We need greater diversity of stock, more choices for people in terms of housing typology and price point, and we need it urgently.