The property market during COVID-19
The flow-on effect of COVID-19 on property prices, demand and investment is yet to be fully realised. In a recent analysis of the pandemic and its impacts on the property market, De Kretser Law reached out to property expert, Torsten Kasper, to shed some light.
Torsten is the Managing Director of Chisholm & Gamon Property which delivers premium real estate results throughout Bayside and beyond. With offices in Elwood and Port Melbourne, his team focuses on customer satisfaction and personal integrity.
The residential property market has had a significant reaction to COVID-19 and its subsequent lockdown protocols. In just the Bayside area, Torsten saw at least a 5-10% reduction in property prices in the first 4-6 weeks of the pandemic.
However, since late April, May and June prices have held firm. Confidence is slowly rising again between vendors and buyers. An interesting insight that Torsten observed is that the balance of power between the vendor and buyer is quite even. Usually, before COVID-19, that balance was unequal depending on the how the property market was travelling.
Torsten also added that property demand will continue to increase in the next six months due to the resumption of migration and Australians returning from interstate and overseas. Given the popularity of Melbourne with migrants, it is expected that their demand for property will resume once lockdown and travel restrictions are removed.
Commercial leases and properties have been hit a lot harder than residential properties. Torsten has seen a 30-50% reduction in the demand for office space. This is due to the uncertainty created by the pandemic, the high unemployment rate, and the ongoing negative economic impact of Covid-19. However, it is important to note that some sectors of the economy such as home improvement retailers like Bunnings appear to have experienced stable or improved sales growth.
Tips for home buyers
According to Torsten, now is a good time to buy property if you are in a financial position to do so. House prices have clearly dropped due to the pandemic and buyers can take advantage of that especially for more expensive homes. Furthermore, interest rates on loans have also been reduced, making buying a home more accessible in this challenging time.
Torsten recommends the following tips for home buyers:
Focus on 2 to 3 suburbs when reviewing locations for your new home. This will allow you to keep a close eye on the market when a suitable property comes up.
Sign up to real estate agents’ newsletters and email alerts for off-market property sales. Torsten states that up to 15% of property sales are not publicly advertised as vendors are reluctant to pay for marketing costs during COVID-19.
Consider looking at a ‘renovator’s delight’ if you are open to renovating or adding value to established properties. There is less demand for such properties because of the pandemic which means that you could get a really good deal.
Make sure you have your finance in order and approved before you put in an offer for a property. During these uncertain times, vendors are more risk-averse and banks are taking longer to approve loans. Almost 95% of vendors would accept an offer that has approved finance compared to one that does not.
Bio: Torsten Kasper
As Managing Director of Bayside's leading real estate team, Torsten is committed to setting the highest standards of excellence to which the whole team aspires. His hands-on involvement with the business means he is continually using his experience, extensive industry knowledge and dedication to inspire and motivate colleagues while delivering exceptional results for his clients.
Every day Torsten brings his marketing, negotiation and communication skills to the benefit of each and every client transaction. Torsten's education and qualifications put him at the forefront of the industry as a licensed auctioneer, agent and industry speaker.
In his spare time, Torsten enjoys watching football, playing tennis, swimming at the local pool and spending quality time with his family and friends.