The COVID-19 crisis has thrown the national economy into turmoil, while property markets are still clearly trying to digest what it all means.

Leading valuers Herron Todd White has tabled their thoughts into what each state is facing and what might lie ahead for the nations residential property markets.

NSW

Sydney has been at the forefront of the battle against COVID-19 given its size and population and as such has seen areas that have been impacted directly by the social distancing measures.

Auction clearance rates have tumbled which is generally a good indicator of sentiment, but there are some areas that are not being impacted.

The Northern Beaches as a whole has appeared to absorb much of the negative sentiment and restrictions surrounding the pandemic. Higher value markets are outperforming entry-level markets at this stage.

Whilst overall transactional volumes are down, agents in the inner suburbs and eastern suburbs are advising that many savvy investors are utilising the current downturn to add to their portfolios. The primary concern in the investment market at the current time is finding a tenant.

In Sunderland Shire local agents are saying that the Coronavirus pandemic has not yet significantly affected prices that properties are achieving at either online auction or via private treaty.

In Western Sydney, HTW are still seeing reasonably strong activity, particularly at the entry level. There appears to be many first home buyers still looking to purchase which is helping the lower end of the market. While there are some sharks out there looking for desperate sellers, agents are doing their best to avoid them by being selective about genuine buyers for inspections by appointment. Listings are becoming increasingly difficult to source as many owners are adopting a wait and see approach until we emerge on the other side of the restrictions.

VIC

In Melbourne, HTW is seeing the CBD particularly impacted as hundreds of units and student accommodation apartment are listed for sale and lease as investors struggle to fill the void and try to replace the regular rent from students who would be otherwise be studying at universities. 

In the outer south east, first home buyers with job security who were looking in the property market prior to the pandemic are encouraged to take advantage of the current market conditions as sellers are more open to negotiation.

In the inner and outer north there has been a reduction in supply of properties due to vendor uncertainty, whilst demand appears to have reduced less noticeably. 

In the inner and outer east, HTW foresee a limited availability in supply of houses and apartments in the coming months, limiting the opportunity for new home buyers and investors to purchase property.

Out west, vacancy rates for rental properties will remain high with tenants and landlords both suffering, however this pandemic and these restrictions won’t last forever and it is a fair assumption to believe the western suburbs will bounce back to their previous market performance and continue to grow as one of the nation’s strongest performing regions.

QLD

In Brisbane, HTW has seen a noticeable reduction in listings and auctions with agents confirming that vendors are postponing their sales. This is understandable as in times of uncertainty, the confidence of achieving a desired price evaporates, so if an owner can afford to sit and wait this out, they surely will. In a practical sense, the hit to valuation figures is still to be seen. 

Agents are reporting to HTW that sale prices continue to be at pre-pandemic values, however, a significant slowdown of new listings to replenish stock levels has been noticed. Lack of stock usually means firmer prices, but in this instance, what’s available might indicate a seller eager to offload their asset.

Sales continue to transact at fairly healthy prices because there are still a number of buyers active in the market. 

SA

HTW is seeing that the banning of public auctions hindered the markets and property types which have a greater level of reliance on this method of sale. The $750,000 to $1.25 million price bracket in the inner and middle rings has historically been popular for sale by auction. 

The investor market has also been drastically affected on the back of state government measures. Measures have been announced which prevent landlords from increasing rents and prevent eviction of tenants for non payment of rent due to distress as a result of COVID-19. These factors are considered to be a deterrent for market entry in the short term. The middle and outer rings are considered most popular with investors, most active in the $150,000 to $350,000 price bracket.

HTW think that motivated vendors and purchasers will see activity remain in the market, however at a lower level of sales volume and price levels to trend downwards over the short term.

WA

Confidence across the residential market in Western Australia has decreased due to the uncertainty created by the pandemic. Agents have reported to HTW that in many markets, enquiry rates have dropped with a higher number of offers being received below asking price.

The Real Estate Institute of Western Australia (REIWA) showed a 0.5 percent increase in Perth property prices during March, indicating that prices are remaining stable for now. Property prices within the state recently enjoyed their best quarter in over six years, however this is anticipated to be short lived. 

The sales market is the main concern as demand is expected to taper which may lead to a period of oversupply in the market.

NT

The Northern Territory is the safest location in the country. As at the Anzac day weekend we’d recorded 20 days without a new case of Covid-19. 

Leading local sales agents are reporting a stable level of interest for stock which was already on the market, open homes have been replaced by private appointments, one agent noting that it has led to more qualified buyers coming through and less tyre kickers. 

HTW are yet to see any firm market evidence the pandemic has resulted in lower rents or capital values, the big test as we look through the forward lens is the speed at which social restrictions are lifted and the time it takes to re-open the economy. If these efforts splutter along and hit road blocks such as a second wave of infection then any confidence which is in the market will evaporate. 

ACT

At this stage, the full impact of Coronavirus on the local economy and more specifically the property market cannot be known. 

HTW are still seeing transactions occurring at all levels and generally agents are reporting that most purchasers are finance ready and able to compete with confidence in the market. Sellers may be adjusting their expectations slightly but this has had minimal impact so far.

The landscape changes very quickly, however, the stable market conditions hold the 

Canberra residential property market in good stead.