The length and severity of COVID-19's impact is unknown but the reality is that the property market
is likely to get worse before it gets better. CoreLogic reports that Sydney sales activity has already
fallen by 40% although April prices held steady with a very small market increase of 0.3%. The full
impact of our current situation won't exhibit itself until the end of this quarter.
More important though is an understanding of the micro-markets that sit behind the statistics. On
the Upper North Shore we are seeing varying trends. As I commented in a recent article in the
Australian Financial Review, it is the premium end of the market that has been the hardest hit ($4m
and above), as that is a more discretionary market. A large portion of buyers in the segment are
already living in a very nice house - they may have a desire to get closer school or have a bigger
home - but it is not an urgent move. Apartment sales are also suffering as the pandemic has made
investors and first-home buyers wary. The mid-market though, from $2m - $3m, is holding up
relatively well due to the lack of advertised stock.
If you have job security and a strong financial future, now may be a great time to move. Holding out
for that elusive bargain may work against you, as once the market surges again you may have
missed the opportunity. Remember, the only way to pick the bottom of the market is when you've
gone past it! With days on market being double and sometimes triple what we see in a normal
market, common sense would suggest that you either sell prior to buying, or negotiate an extended
settlement if purchasing first.
Nerida Conisbee, Chief Economist at Realestate.com.au, suggests that people should take a longer
view of property. "Given that prices do tend to go up, it always pays to hold long term and kind of
ride through the cycles, as opposed to trying to pick the bottom and top of a cycle, which is very
difficult to do." She cites the strong growth in the decade following the GFC as evidence of this
long term growth trend. At the end of the day, Sydney remains a city that is always in high demand.
From a selling perspective, we are highly unlikely to see another boom anytime soon, given the
backdrop of impending recession. If you're contemplating a move, putting that decision on hold
could mean waiting 12 or 18 months or more. And if you're concerned about the lack of choice to
buy, I recommend you seek out agents such as myself who have strong pre-market and quiet listing
portfolios.