Before the spread of the Coronavirus in Australia and across the globe, it was expected that the prices of houses would increase in 2020. As a result, the situation of the real estate industry would improve with sellers getting a better turnover. However, the current pandemic has done the opposite for those looking for residential homes for sale. Even though prices are dropping, people can’t afford to buy houses because they’re uncertain about their employment. Here’s an insight into what 2020 holds for real estate in Australia.
What Is the Current Economic Situation Doing to the Prices of Houses?
Other than affecting people’s health, the Coronavirus pandemic has significantly hurt the economy. This is because a lot of businesses have had to close down while others continue to function remotely. As a result, a lot of businesses have had to lay off some of their employees so that they can still stay afloat in these trying times. Consequently,the increase in unemployment will result in an expected 10 percent fall in the prices of houses in 2020 in Australia.
This has hurt the real estate agency on the whole, even with the presence of stimulus packages by the government. The aim of the stimulus packages is to reduce the damage the current pandemic has caused to the economy. These are also aimed to help those who’ve been unemployed because of the pandemic. However, there’s only so much that stimulus packages can do. The effects of mass unemployment are still going to be felt in the real estate industries and others as well.
The Current Economic Situation Will Hurt Most Sellers
The price drop will definitely hurt the real estate agency. Sellers will receive a lower turnover when selling houses during this time. Sellers who need to make sales urgently will be most affected because they won’t have the choice to wait until the condition of the real estate agency improves. That said, those who can wait out their sale won’t be greatly affected by the effects of the economy. They can choose to sell their houses once the situation gets better.
The Current Economic Situation May Be Good for Buyers
The economic situation caused by the Coronavirus may be good for you as a buyer if you’re confident that your job is secure. The lower prices can help you get great deals at bargain prices, allowing you to find your dream house at a price you can afford.
You should only consider purchasing a house if you’re positive that you’ll have a source of income throughout this period in 2020. This will also depend on the nature of your job and the job position you currently hold. If you’re planning on purchasing a house in the suburbs in New South Wales, make sure to look for experienced real estate agents in Carlingford. They should be able to find you a good deal in your budget.
However, this may not be the case for everybody. A lot of people are being laid off from their current jobs so they won’t have the means to purchase a house. Therefore, this price drop only helps those who have a steady source of income during these trying times.
The Number of Real Estate Purchases Will Be Low this Year
The current economic situation doesn’t seem like it will get better any time soon this year. There have been further estimations that indicate that unemployment will increase even more towards the middle of this year. Bill Evans, a chief economist at Westpac, predicted that the rate of unemployment would increase to 11.1 percent by June. He also predicted that it would stay in that condition for the rest of the year.
Therefore, as a result, more people won’t be able to buy houses in this situation. This is because a greater number of people won’t be able to afford to invest in a home when they’re unemployed. Even if they have money saved up, people are going to want to save it in case of other emergencies. And those who are still employed may feel sceptical about making a big investment during this time. Job security at this point in time is low, so people may not want to risk having to pay debts after being laid off.
While the situation of the economy is predicted to get worse over the next months in 2020, analysts have also predicted that there would be a rebound in the economy in 2021, if not late 2020. If the predictions are true, then the situation of the real estate industry will also improve. This means that the number of sales will increase, and the prices of houses will also increase.
Restrictions on Auctions and Open Houses
In order to prevent the spread of the COVID-19 virus, the government has imposed restrictions on real estate auctions and hosting open houses. Therefore, a lot of buyers are unable to visit houses and review their options for purchase. As a result, buyers have been discouraged to look for residential homes for sale. This, in turn, lowers sales, which hurts the real estate industry as a result.
That said, real estate agents are counteracting that by hosting house auctions online instead. Users can post their bids via video links. This may not be an efficient system, but it will help in keeping the real estate industry afloat.
Possible Increase in Sales of Houses in Suburbs
Considering people are required to practice social distancing, i.e., staying 2 meters away from people and staying at home, more people may opt to find residence outside of crowded cities. They may purchase houses in the suburbs, where there are fewer people, and the houses are larger as well.
The current pandemic has caused a lot of harm to people and the economy. Consequently, the real estate industry is suffering, even though real estate agents in Carlingford and other parts of Australia are trying hard to keep things afloat.
Author Bio:
Harcourts Carlingford, We are real estate agents in Carlingford, we cover all aspects of real estate from residential sales, auctions, property management and commercial leasing and have a proven track record of success.
