Buying Property During COVID-19 – How to Do It Right
COVID-19 has transformed all of our lives and upended the way we do things – and purchasing real estate is no exception.
At Cohen Handler, we want to help our clients stay on top of the market, regardless of how chaotic or uncertain times may be. To help you make more informed decisions for your portfolio and your family, we’ve prepared this short guide for anyone looking to take the keys to a new property during the pandemic.
For investors – change your plan of attack
As property prices decline for the first time in almost a year, it’s an uncertain moment for Australia’s investors. While many are battening down the hatches in the face of an emerging recession, others are taking a different tack. Some investors are distinctly more liberal in their approach, seeing this moment – with its attendant crises and disruption – as a moment to advance on the market financially.
With the right forethought, the current situation may lend itself to bullishness. That doesn’t mean ‘business as usual, but more’. Different situations require different tactics, and this is a situation like no other. COVID-19 is upending many of the old assumptions investors rely on when choosing a property. As the situation is still ongoing, there’s no way we can provide a conclusive ruling on what these changes are, we can only speak to trends and predictions.
One that we have seen emerge from this crisis is a potential turning away by renters and occupiers from the idea of dormitory suburbs. Previously, property investors could expect a premium in rent yield for properties well positioned along public transport routes – even where these properties were in outlying suburbs. With the pandemic making us all hyper-aware of our contact with other people, many people’s opinions of the public transport system have changed from it being a fact of life to a potential disease vector. In practical terms, this means people may be more likely to look for properties within walking or cycling distance of their work, paying a premium when once they would have been happy with a similarly long commute by train. This could potentially impact the value of homes in outlying suburbs that rely on train or tram connections, as well as further raising the value of properties positioned close to business centres.
While property prices are yet to fall substantially – dropping only 0.4% throughout May – the end of financial year and a relaxing of social distancing restrictions offers a moment for investors to reassess their portfolios for durability.
For home-buyers – look for opportunities
Great disruption so frequently brings with it great opportunity. Home-buyers caught in the midst of their search by COVID-19 have had to adapt to a range of new requirements such as virtual home inspections and auctions conducted by teleconference, but their patience and adaptability may be about to be rewarded.
Home-buyers who’ve retained stable employment and have held onto their deposit may be able to step up to a better home in a better location. Home-buying – especially if this is your first property – is so often a game of compromise, but with residential property prices predicted to fall up to 8% before Q4 2020, savvy buyers may be able to secure something more luxurious or better positioned for the same money.
This is also a moment to reassess what you want from a new home. With many experts tipping that work from home is soon to become even more widespread regardless of the public health situation, some buyers are changing tack. Architects are predicting a move towards more varied residences that include dedicated study space and away from the extremely common open plan living spaces of the past two decades. Think hard about what your career would look like after COVID-19 and start building that life now, so you’re ready when it arrives.
Regardless of your objectives, COVID-19 has changed the way Australians are buying houses. As of mid-June, realtors have returned to in-person inspections and auctions, but the pandemic presents such a dynamic situation that this could change over the next few months.
Until such time, take basic precautions at any in-person inspection or auction. During the peak of the restrictions when only virtual tours were offered, many agents adopted the practice of wearing masks and disposable gloves while attending a property – consider if this is appropriate for you. Regardless of whether you choose to wear PPE, maintain social distancing of a minimum 1.5 metres between yourself and all other attendees and avoid touching shared surfaces and objects where possible.
To limit numbers – and to help them secure the best price – many agents are listing their properties via private treaty or offering them as off-market sales. But just because there’s not a listing doesn’t mean they’re off-limits. Cohen Handler has strong relationships with agents across the country, giving us unparalleled access to some of the finest homes in Australia being sold off-market.
If you’ve been looking and you’re just not finding it, look in a different place. Speak to the team at Cohen Handler today on 1300 420 160 and let us help you secure a property you’ve always imagined but never seen.