It would be easy to assume that the property market is tanking all over the world. National media outlets cannot help but treat the whole industry as one big story. Also, traditional media needs to compete with online content providers so everyone is prone to sensationalism and exaggeration. The reality is, real estate regions are reacting to the present crisis in different ways in different places.
This is why, in these uncertain times, BPS will be doing a local property market watch every month instead of the usual three or four a year. Although no one can predict the future it is important to get the facts on not only what is happening but what is happening in the local market as opposed to the rest of the country.
All the listing agents I have spoken to say that buyers are still buying and sellers are still selling. Most agents are saying they have not been this busy for a while. Some buyers certainly took their chips off the table in April and are waiting to see what happens next. But then there were new buyers entering the market due to the pandemic. These new buyers were probably planning a move but decided to bring it forward.
Agents are also saying the buyers are realistic and the sellers are serious and committed – no tyre kickers or just curious. It did feel like there was a bounce in new listings in April but that has settled. If anything I am now noticing fewer new listings than usual. There is a rise in demand for the classic Byron Dream, small acreages with a view 20 minutes from Byron. In a time of crisis, it is natural to want to put down roots in a veggie garden, have a water tank and a solar system. I have not yet heard of any discounting or distressed sellers at this time.
Stay At Home
The new normal includes the practice of working from home. There is no doubt that many workers, and many employers, have tasted, and now enjoy, the benefits of working from home. Therefore locations like Byron Bay are experiencing even more demand from mobile and tech-savvy workers and entrepreneurs. This trend will continue if anything, probably even after the job support scheme ceases.
Even the national market is not yet heading into negative territory. There was definitely a pullback in turnover in April but even that has receded. Core Logic most recent report stated:
Transaction activity through May showed positive signs, with an 18.5 percent bounce back in activity following a 33 percent drop in April. CoreLogic head of research, Tim Lawless, said “Considering the weak economic conditions associated with the pandemic, a fall of less than half a percent in housing values over the month shows the market has remained resilient to a material correction. “With restrictive policies being progressively lifted or relaxed, the downwards trajectory of housing values could be milder than first expected.”
This accompanying chart shows this trend line of the median house prices in Sydney and Melbourne only.
We may see more changes to the market as the full ramifications of the pandemic affected economy play out. The government stimulus package will cease at some time which may see further restrictions. But it is possible that Byron and other pockets of high demand property may be immune from major shocks and price falls.
The main message would be this: Time in the market is better than timing the market. It is times like this that many would-be buyers consider it worthwhile timing a property buying or selling decision in order to profit from a drop or surge in the market. My experience after 35 years of interest in property, and 20 years as a property buyers agent is that second-guessing the market is rarely worthwhile.