By Herron Todd White
With COVID-19 ruling our past, present and future, it’s becoming increasingly evident at the time of writing that we simply don’t know what is going to happen to the property market. We are at that uncomfortable point in the cycle where we have to rely too much on gut-feel and anecdotal evidence, hardly the best basis for making rock solid decisions. Until we get to a stage where we have more transactions completed entirely in a post-COVID-19 world, anecdote is the best we can hope for.
Feedback from agents in and around the Hunter Valley has largely been the same as pre-COVID- 19-a lack of stock for sale. Agents have had their movements severely curtailed over the past several months and a lack of face to face encounters has resulted in a noted lack of listing activity. It appears as though potential vendors have decided to wait out the lockdown before deciding to list. Whether this is because other events have taken over their focus or they have surmised that current restrictions are not conducive to a favourable sale is unknown. Given that interest rates are still low, the government has put in place significant stimulus packages and there is a lack of stock presently on the market, it’s not inconceivable to expect the market to remain relatively stable in the short term. Required elements are in place for this, but as always the market can change overnight with every news update. A surge in second wave cases could change everything.
In COVID-19 times an alternative to buying and selling your property is the trusty renovation. There were rumours going about that Bunnings was running out of its paint supply simply in anticipation of lockdown, the assumption being that plenty of people would have a lot of spare time on their hands and renovation would come to the fore. In reality, that spare time seems to have morphed into TikTok videos and accessorising bookshelves to appear in Zoom meetings. No Zoom meeting is complete without a cerebral biography or two by someone inspirational or Russell Brand. If you have been skillful enough to write a book, you should also heavily consider having it over your left shoulder, cover out. We’re looking at you, Malcolm Turnbull. Renovation in times of uncertainty is often the popular option to flipping property. The financial cost to buy and sell a property can be quite expensive and if we keep in mind what was discussed in the first few paragraphs, choice in the marketplace is limited at present. You may not find what you are looking for in a ready-made package or the cost may be prohibitive. Presumably your current property had enough features about it that made you invest and move in. Sometimes it makes financial sense to improve what you currently have without suffering the significant transactional costs of buying and selling.
Given the uncertainty in the marketplace at present and the underlying macro-economic conditions, we would expect to see minor renovations continuing. We are aware of larger more significant renovations that would have occurred previously, being placed on hold in the short term. This is in part due to many homeowners facing different economic pressures than they did pre-COVID-19. Many people have seen their salaries either reduced or deferred while the present crisis works its way through the system. Some will have found that their jobs and therefore income are suspended whilst businesses are closed. Many have lost employment and are in no position to do large-scale works to properties. It may be that with reduced demand, building contracts and contractor’s quotes can be reworked within the new market climate due to a shortage of work.
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DISCLAIMER: The information contained in this article is correct at the time of publishing and is subject to change. It is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on this information, Smartline recommends that you consider whether it is appropriate for your circumstances. Smartline recommends that you seek independent legal, financial, and taxation advice before acting on any information in this article.