Should you Invest in Property During the Coronavirus Pandemic?
Recently we have been asked how Coronavirus will affect house prices, and if now is a good time to buy a property. While the COVID-19 crisis has significantly impacted the property market with changes to inspections and auctions, interest rates are at an all-time low making property an attractive investment to many people. At PRDNationwide Canberra, we are the leading real estate agent in Canberra locals rely on for high quality real estate services and support. There’s no doubt the current pandemic situation poses numerous challenges to the housing market, however property can be still extremely lucrative to house-hunters who are in a position to buy.
Will House Prices Drop Due to Coronavirus?
While it is evident that Canberra property transactions have reduced, it is also expected that house prices in some locations will drop due to COVID-19. Consumer confidence and job security are major factors when looking to buy a home and with many Australians experiencing financial hardship due to job loss or reduced hours, there could be a fall in demand over the coming months. It is likely that the higher-end markets will be the worst hit, with luxury properties in upscale locations likely to be purchased at a much lower price than previous. Well-located homes in middle-class suburbs should hold their values, and regional markets that do not depend on tourism and hospitality might not suffer as much as holiday towns. Even with government support packages it’s likely that many house prices will not remain at their pre-COVID values.
The main reasons experts are indicating that house prices will fall, include:
· Borrower uncertainty – many people are unsure ability the on-going stability of their employment and don’t want to commit to a home loan if they are not confident they can make the repayments.
· Social distancing restrictions have affected the home-buying process meaning there are fewer auctions and inspections, and the number of property transactions has decreased. While the market has shifted to online platforms, some people are reluctant to purchase a property off an online inspection or auction.
· Even though the real estate market has performed better than the share market against the negative economic shock of the pandemic, the economic slowdown must be considered.
Can I Still Buy or Sell Property During the Pandemic?
While the way property transactions are completed has changed, there are no restrictions in place that prevent the sale or purchase of a property. Rules and restrictions vary from state to state, however most real estate agents around the country now conduct virtual tours and private inspections and most auctions have moved online too.
Is Now a Good Time to Buy a Property?
It’s hard to say if house prices will continue to fall or stabilize over the coming months, however, for those who are in very secure jobs and are in position to buy, they may be able to take advantage of the weaker position of the current real estate market. With less buyers in the housing market, there’s fewer people competing for each property. Combine that with very low-interest rates on offer, then now could be a great time to buy if your job and income have been stable. It is important to take a long-term approach, property prices will bounce back once the economy re-gains momentum, so if you can get your foot in the door now you will likely be rewarded with a solid investment in the long term.
Tips for Buying a Home During the Pandemic
· With banks tightening their policies and borrowing becoming harder, work with a lender to see if you’re in a safe financial position to get pre-approved for a home loan before making any offers.
· Confirm with your employer that your job is secure. Banks and lenders are performing employment checks prior to settlement, so even if you think your job is stable, a letter from your employer confirming your situation will help ensure a smooth transaction.
· Even though virtual tours and digital inspections are becoming the new normal, it is still best to schedule a private viewing – just ensure you adhere to the social distancing guidelines in place.
· Consider using a buyer’s agent, they are experienced in the market and will be able to help with shortlisting houses and ensure you buy at the right price.
In these uncertain times, it’s natural to feel apprehensive about making the leap into the property market, but with the right advice and support, you could actually find that it may in fact be a very advantageous time to purchase your new home. PRDNationwide are the real estate experts in Canberra, and we are here to help you navigate the current market to secure your new home or investment property. Get in touch with us today on (02) 6262 5232, send us an e-mail to firstname.lastname@example.org or send us an enquiry online.