While market activity has been curtailed by lockdowns around much of the country, would-be buyer can take advantage of the lull in transactions to make sure they are well-prepared to act once the delta variant loosens its grip.
During the past months, Australia’s three biggest markets – Sydney, Melbourne and Brisbane – have all experienced lockdowns that have restricted the ability to hold inspections and auctions, and many vendors have postponed or pivoted sales campaigns.
Corelogic Data shows Sydney new listings fell by more than 17 per cent over the four weeks to the middle of August. Around the nation, total stock advertised was down 27.1 per cent on the five-year average in the four weeks to August 8.
But as vaccination rates rise, normality could resume in the months ahead, and buyers and vendors looking to transact after the lockdowns can take advantage of the hiatus to carry out crucial planning and preparations to ensure they aren’t left flat-footed by a sudden surge in market activity.
This market phenomenon has played out before, after Melbourne’s protracted lockdown in 2020 and subsequent lockdowns this year, which drove unseasonably high auction numbers across summer, and the busiest autumn auction sales period on record.
The timing surrounding lockdowns can be as unpredictable as COVID-19 itself, often rendering the best laid plans redundant in a matter of hours. But while plans are fraught with uncertainty, preparedness takes on increased importance to ensure investors are poised to jump on fast-moving opportunities as they arise.
Market turmoil always creates unexpected risks and opportunities for investors – with the well-prepared likely to avoid the former and capitalise on the latter.
Tips and tricks
Buyers that have used the windows between lockdowns to carry out preparations that can’t be achieved remotely – such as in-person viewings and building inspections – are well positioned to bid for a property that has been hastily migrated to an online auction.
Throughout, it pays to develop close relationships with key agents who deliver supply in a buyer’s target suburbs, both through personal contact and signing up to campaign databases.
Given the uncertainty that sits around transactions, vendors may opt to proceed with a sale despite reduced competition, offering informed buyers an impromptu, unique and valuable purchasing opportunity.
While in lockdown, buyer can remain productive by undertaking online property and market research, as well as ensuring they have finance organised and ready for deployment at short notice.
Sudden lockdowns can be hugely disruptive for vendors, forcing them to proceed, pivot or postpone their sales campaign depending on timing and demand.
If vendors have been forced to postpone an auction date because of lockdown, it’s important that they reschedule to avoid non-lockdown-related interruptions, such as grand finals or public and school holiday periods.
Meanwhile, for those earlier on in the process, lockdowns give vendors plenty of time to plan and ensure their sales process is in order. This includes all necessary legal documents, as well as booking interior decorators and tradespeople – ensuring campaigns aren’t delayed amid high demand for contractors once restrictions ease. For both buyers and vendors alike, flexibility is key.
The sudden and artificial market downturns created by lockdowns are a unique and novel phenomenon that I have not experienced throughout my career in property, with the resulting pent-up supply and demand, overriding the predictable seasonal slowdowns. As a result, vendors and buyers must be prepared to complete transactions closer to Christmas and into the traditionally quieter summer period.
The sharp and sporadic nature of lockdown-driven dips also differs significantly from the more elongated slumps created by economic downturns, such as the 2007-08 global financial crisis, the aftermath of September 11 and the 1990s recession.
However, like these previous disruptions, there is little doubt that traditional property market patterns will return once Australia can effectively manage COVID-19 and life returns to a degree of normality.
Until then, the ever-important attributes of preparedness and agility will take on even greater significance in determining successful property investment decisions over the long term.
This article is from Australian Financial Review, please click the following link for the original article: https://www.afr.com/property/residential/how-to-prepare-for-a-post-delta-property-market-20210823-p58l2k