The COVID-19 epidemic has shown how a single crisis can reverse the momentum of a thriving real estate market. However, one expert says there are ways for estate agents to stay happy and resilient in the dark.
The coronavirus crisis has dampened growth projections for the Australian housing market, which was poised for an upsurge before the pandemic reached its full extent. As a result, no one was spared as both sellers and buyers felt the impact.
"At the start of the COVID-19 pandemic, there was great uncertainty from both buyers and sellers nationwide," said Mark Armstrong, CEO and co-founder of the real estate website RateMyAgent.
"The decrease in the sense of job security, the increase in layoffs and the strict physical distancing measures meant that buyers and sellers were effectively putting an end to their buying plans or sales – lest it be actually a terrible time to enter the market. »
Armstrong also admits seller and buyer confidence has dropped to an "historic low" because auctions have been canceled, inspections have been banned without indication of recovery, and the Australian economy has slowed significant in most sectors.
The satisfaction of sellers decreases…
Uncertainty resulted in a 5% drop in seller satisfaction in April, after a promising 17% increase in the first quarter of the year, according to the latest RateMyAgent report.
The decline was most significant in metropolitan areas, the largest markets in the area, Sydney and Melbourne, recording decreases of 16 and 10 percentage points, respectively. The Queensland and Victoria regions also reported a decline in agent happiness, albeit less marked.
Armstrong says that "higher expectations of how much" should "sell a property" have largely contributed to the dissatisfaction of sellers in capital cities.
"This high expectation is to be expected and arises from periods of growth in property value that has been sustained and prolonged in recent years, in particular in the markets of Sydney and Melbourne where growth has continued to grow. 39; increase, "he said.
"Receiving a lower price than expected will be psychologically more difficult for sellers in this market to accept, while regional markets are more likely to be always satisfied with their selling price in the event of a market downturn like the COVID-19 pandemic. »
… but not as bad as expected
While agent satisfaction has declined in many areas, Armstrong says the decline was not as severe as expected, indicating the resilience of the real estate market.
"If you consider the low level of supply in April and May due to COVID-19, it is incredibly likely that the market will rebound in the coming months," he said. "Sellers who have been hesitant to list their property will begin doing so in the coming months, which will lead to a potentially aggressive oversupply in the spring."
"The good news for buyers is that with a higher supply, competition decreases. Market data showed a slight drop in house prices in April, which is a great indication for buyers that they should definitely be looking to buy now. »
Armstrong also claims that current economic conditions indicate that the timing is right for sellers to enter the market.
"Consumer confidence is improving, restrictions are easing and interest rates are at an all time high – now is the perfect time to sell," he says. . "We anticipate that we will see a fully supplied market grow on the basis of 20% less goods sold at this time [compared to] 2019."
Armstrong says market retention in terms of supply is unlikely and advised sellers to "enter the market when competition is down."
How agents can become "essential" in a constantly evolving real estate market
One thing that the COVID-19 pandemic taught property sellers is the value of adaptability and resilience in an uncertain economic landscape.
Armstrong, however, emphasizes the importance of good communication to be adaptable.
"It is important that agents stay connected socially, [both] online and in real life, and continue to nurture and build relationships with customers," he says. "Today more than ever, it is important that agents are adaptable, agile and focused on delivering high quality results to buyers and sellers."
Armstrong says he expects some reluctance from buyers and sellers as the market slowly reopens – and this is where open communication can work wonders.
"Buyers and sellers will be nervous, so it is important that agents are able to restore confidence and optimism to their customers. The best way to do this is to maintain a strong sense of trust and communication. by maintaining regular contact with suppliers. "
What future for the Australian real estate market?
Armstrong says a solid recovery in the Australian real estate sector is expected as restrictions begin to ease and buyer confidence increases.
"April was the absolute peak of uncertainty for the Australian real estate market – no doubt about it," he said. "However, the good news is that we are already seeing an increase in customs clearance rates in all markets, the return of auctions and rental inspections, and a decrease in uncertainty around the COVID-19 pandemic. "
Armstrong Says He Anticipates "Strong Bounce" in Buyers 'and Sellers' Confidence in the Coming Months, and "The Real Supplier Satisfaction Test Will Come in the Spring" When the Market "Tends [s] to see higher levels of real estate supply as the weather warms. »
"Our prediction is that we will see a complete real estate market across the country in September, when pent-up demand and withdrawn supply will flood the market," he said.
