By Herron Todd White
Mount Gambier Property Updates
At the time of writing, there have only been three recorded positive cases of COVID-19 in Mount Gambier and another three recorded cases around the Limestone Coast region. Infection rates are low and community lockdown seems to be working. If residents continue to follow the rules and regulations put into place, then the spread of the virus is likely to be reduced.
The virus has not had a significant impact on our day to day operations as valuers in the property market. Procedures have been put into place to ensure that valuers are not entering any properties where they may be at risk of either contracting or spreading the virus to high risk residents. We have also been asking that customers open all doors and turn on all lights prior to valuers arriving at the property. The creation of the contactless inspections valuation report is an innovative way the industry has been able to quickly adapt to the COVID-19 environment. A contactless inspection is where the valuer completes the inspection without inspecting the interior of the dwelling or coming into contact with the owner or tenant. When completing these, it is very important that we ask customers relevant questions to ascertain any details of the property that we might not be aware of. Alternatively, kerbside and desktop valuations are an option too. As a precaution, the administration team and valuers may need to ask questions such as, “Have you been overseas recently?”, or “Is there anyone in the household that is or has been sick?”.
So far, we have not seen an overall fall in confidence across the property market in Mount Gambier, however it is still early on and this may change. This could be due to factors such as the RBA cutting the cash rate and many banks implementing policies to assist customers with their home loans. Many banks have provided mortgage relief by freezing home loan repayments or offering new low fixed rate home loans. The federal government has offered financial assistance to individuals and companies to help provide some relief in the short term. However that’s not to say things won’t change in coming months. The Coronavirus has caused a large number of employers to close businesses and stand down staff and in turn this has created a great deal of uncertainty in the community and in the economy.
In Mount Gambier we have not yet seen any material evidence to suggest that values and rents are falling, however the rental market is likely to be the first to show signs of the impact of the Coronavirus. The number of properties available for rent is increasing and this is partly because many homes that were rented out as short term accommodation or on Airbnb are now being listed as long term rentals. Travel restrictions and the lack of tourism has hit this part of the market hard. The increasing supply of rental properties is likely to result in rental prices falling.
As well as forestry and agriculture, the economy of Mount Gambier is also largely driven by the service industry, with some of its key areas of business including tourism, hospitality, retail and education. The majority of restaurants and cafes have been forced to close or only remain open to offer takeaway services, the tourism industry has been hit hard due to the closing of borders and the lockdown and self-isolation laws, many children have been learning from home and retail stores have temporarily closed their doors. Mount Gambier is definitely not immune to the financial impacts of the Coronavirus.
However, with record low interest rates, it is a good time to buy property. Any reductions in value will provide a good opportunity for property investors to enter the market. With the uncertainty that has come from the Coronavirus, people may be less likely to invest their money in property and this will impact the property market and in turn values. This will be something to keep an eye on over the coming months.
It is difficult to predict the future effects of the Coronavirus on the Mount Gambier market as it really depends how long government and economic restrictions last. The shorter the period of restrictions, the better placed we should all be. We may see a slow in the market due to lack of consumer confidence, or on the opposite end of the spectrum we may see people taking advantage of the low interest rates and deciding it could be a good time to invest.