Unprecedented shutdowns to contain the spread of coronavirus have disrupted Australia’s property market for the foreseeable future.
Public auctions and open homes are now banned as the federal government moves to limit large gatherings of people to contain the virus.
Further lockdowns are anticipated and there’s no end in sight yet, but buyers and sellers are continuing to transact, despite the unusual circumstances.
“The real estate market is still moving but we are moving with private inspections and private auctions,” says Ray White chief auctioneer Alex Pattaro. “Buyers still need to buy and sellers still need to sell.”
Social distancing measures present challenges for home buyers, but the property industry is rapidly adapting to the pandemic.
Innovative ways to inspect and transact real estate online are rapidly being adopted, but in some ways it’s back to basics.
How to find and inspect a home during the coronavirus pandemic
Online property portals and social media will continue to be the main way buyers browse, discover and shortlist properties, but agents are enhancing listings with interactive features.
“We’ve increased the use of videos to make sure people get a good first look at the property,” says The Agency co-founder Shad Hassen.
The ban on open homes will mean a change to buyers’ typical Saturday morning ritual. Private inspections now need to be arranged with agents.
Governments have encouraged people to stay home as much as possible, meaning agents and vendors are seeking only qualified buyers.
“Those people who are not actively looking are unlikely to want to come and inspect homes,” Hassen says. “Those people who are serious are going to remain in the marketplace.
“The number of people that we take through is lower, but the quality of people in the sense of readiness to buy is quite strong.”
The changes mean buyers need to narrow down the number of properties shortlisted for inspection.
“The passive buyer now needs to be more focused around their priorities,” says Cobden and Hayson director Matthew Hayson. “They don’t have the luxury and probably don’t want to look at five priorities to assess value. They want to look at one or two.”
Agents are following social distancing protocols to minimise in-person interaction and limit the spread of coronavirus.
“We’re now having to ask questions like ‘Have you been overseas? Have you been in contact with anyone with the virus?’,” Hayson says.
How online auctions work
The ban on public auctions has triggered an increased uptake of online auctions, which are still allowed. Many of this weekend’s scheduled auctions will now be conducted online, which experts say are here to stay.
“I think the online auction will pick up now, and I also think it will have longevity,” Belle Property Albert Park auctioneer David Wood says.
Online auctions operate under the same rules as public auctions. Bidders will be provided with a link and instructions by the agent.
“The buyers will be in the comfort of their own home,” Pattaro says. “The platform allows people to see what’s happening in real time.”
Bidders in NSW and Queensland need to register in advance, although this isn’t a requirement in Victoria.
“We’ll still have an auctioneer in front of the camera, buyers will be able to see the current bid, the bid that they can raise, and they can make a bid,” Wood says.
Remote bidding has existed for some time, and phone bids are still an option for those uncomfortable bidding online, Pattaro says.
“People who aren’t tech savvy can sign an authority to bid directly to the agent via telephone.”
Pattaro says agents and auctioneers are making the transition to online auctions as smooth as possible.
“The last thing you want to do is make a consumer jump through lots of hoops in an already difficult time.”
What buyers need to do to secure a home in the current market
Buyers need to be proactive, ready to move quickly and, as always, prepared financially. Job security, the ability to afford loan repayments, and pre-approval from a lender are crucial in the current economic climate.
“Be ready for any opportunity that may arise,” says buyer’s agent Nick Viner of Buyer’s Domain. “Agents are going to be keen to wrap up deals with existing buyers rather than waiting two or three weeks in very uncertain times.
“Agents are encouraging buyers to bring any offer forward, even if it was an offer that a week ago would never be considered.”
Wood said pre-approved buyers who can make unconditional offers are in a strong position.
“This market will throw up some really good buying opportunities,” he says. “Buyers should not be afraid to make offers prior to the auction.”
Buyers should expect increased engagement with agents, and be prepared to negotiate.
“You’ve got to reach out to the agent more regularly,” Hayson says. “We’re moving more to a one-on-one basis. People will lean more towards private treaty.”
Increased transparency will be the key to ensuring transactions run smoothly, Hassen says.
“Communication at times like these is paramount,” he says. “If we communicate with people clearly and tell them what the asking price is going to be, we will have a much higher chance of closing deals.”
Ref: Daniel Butkovich (on 27 Mar 2020). How to buy a home during the coronavirus pandemic. Retrieved from https://www.domain.com.au/advice/how-to-buy-a-home-during-the-coronavirus-pandemic-944414/
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