Based on Reported Auction Results* PLEASE NOTE PUBLIC AUCTIONS ARE CURRENTLY IN SUSPENSION DUE TO COVID-19 RESTRICTIONS

What Is Happening In The Property Market?

To find out, we have contacted a number of selling agents to gauge just that  … To follow is a broad summary of their observations and activity, with a comment from us.

There are several notable changes to the normal conducting of business and most readers would be aware of these changes from the press. Less generally known are the flow-on effects to the parties involved in the transacting of property. For both purchasers and vendors the process is now very different. Agents too are in a market far more reminiscent of markets from decades ago, when auctions were less dominating than they have come to be and marketing (advertising) of individual homes as a general rule, is considerably scaled back …

The COVID-19-driven changes have seen public auctions and house “open for inspections” stopped, now replaced largely by “private sale”, “expressions of interest” (EOI – in essence a private sale) and low numbers of auction sales carried out but not in the public arena. “Off-market” sales – that is, private sales with very little or no public advertising, are now carried out more than ever … Inspections of properties are now all conducted “privately, by appointment” by agents, with individual buyers. Buyers are often able to see virtual tours of properties prepared by some estate agencies, but in reality this is a precursor to an inspection rather than a replacement to physically inspecting.

The consequences of these changes outlined above, are significant.

Due to a feeling of uncertainty, many vendors are not putting their property on the market, preferring to “see what happens” and presumably awaiting a return to more conventional times. Result? Fewer properties are coming on the market. Agents are commonly reporting 10 to 20% fewer listings currently (compared to the very recent level) and far fewer buyer numbers. However, this last comparison concerning buyers must quickly be qualified … Without open for inspections for future or luke-warm buyers and spectators to wander through, numbers through front doors are doubtless dropping dramatically. But agents report that there are still good numbers of serious buyers about and so the market remains in relatively pretty good health. Prices may have eased from 5 to 10%, but some agents were reluctant to concede a drop of even this magnitude.

Selling agents will be busier doing business this way: it’s the long way home in many respects. On the plus side, while genuine buyers are about, some sales will often occur even faster than via a conventional marketing campaign.

The party most likely to miss out in this environment is the buyer. Buyers have for decades now been accustomed to the anonymity and free-and-easy exposure of properties for sale via the internet. This has enabled them to avoid direct initiation of contact with agents in relation to properties for sale. Far fewer properties reach the internet at the moment so these buyers will never know fully what is actually available for sale. In my forty plus years in real estate I have never known buyers to relish ringing agents(!), so I don’t anticipate this behavioral pattern changing any time soon … Such reluctance, it could be discovered, may be to their great disadvantage given current market circumstances. Enter, buyer advocate services from the old school!

Best wishes to all,

Bruce Renowden
0412 100 501