To say that it has been eventful start to 2020 would certainly be an understatement and with the world battling the Coronavirus, the floor beneath us is constantly changing. Over the past four weeks, in response to the economic impacts of the virus, we have seen rapid declines in the interest rates, several changes to fiscal and monetary policy, and government-backed initiatives to assist the several industry sectors which have come to a complete halt. With daily updates consistently moving the goal posts, housing and market data from the last month is now considered largely redundant in capturing consumer and industry sentiment. A new set of restrictions, never before imposed, now also means a whole new approach to the property market is required.
Taking on a local perspective the Epping market has seen a reduction in property transactions, when compared to the month earlier. Auction clearance rates have also reduced to now hovering at approximately 60% however, a strong argument for this is due to the newly placed restrictions banning public auctions and open homes. Although a number of results are yet to be disclosed the most notable sale to occur during the month of March is that of 5/42 Dorset Street, a brand-new build positioned approximately 1.4kms from Epping Station, which attained a price of $2,350,000.
New government restrictions now mean that all public open homes and auctions are no longer allowed and inspections are now restricted by a two-person rule, unless they are family members. By this, the traditional methods our market has become so accustomed to will need to be adjusted and new methods be adopted. By this, it is expected that Private Treaty, Forthcoming Auction, and Off-Market will become the dominate sales methods.
Private Treaty will remain the simplest approach, allowing for private showings and relying on accurate and adjustable price guides. Forthcoming Auction is an approach which has great potential in this current climate. It provides for no commitment on a date, and then when there’s enough buyer demand an online or phone auction can be scheduled. The big driver here is the ability to sell under auction conditions when an auction is called. The benefit being that certainty can be provided during an uncertain market. Off market sales are expected to also see a rise as owner’s aim to reduce the traffic through their homes and only dip their toes into the market before making an educated decision.
Earlier this month the RBA announced the much expected 25 basis point reduction to the cash rate, to the new historic low of 0.25% and made it clear that it would remain at this level until labour markets return to stability. As a benefit to buyers in the market many of the banks have passed on this reduction to boost buyer confidence, offering 2 to 3 year fixed rates under 3%. The effects of these initiatives are yet to be realized however; buyer enquiries have certainly increased following the announcement. One noticeably trend at present is the surge in activity from first home buyers hoping to take advantage of lending conditions.
We have seen more change in our industry in the last week than we’ve seen in the last decade. Regardless of this, people will still need to upsize, re-locate, downsize, invest. It is how we approach this changing market that will make all of the difference.
To see how we at Hunt could assist you in navigating today’s property climate contact Peter Hunt on 0434 821 219 or email firstname.lastname@example.org