There isn’t a seller, or buyer out there today in real estate land, who isn’t Googling questions about what impact coronavirus will have on house prices.
As the state emerges from COVID-19 lockdown and the economy splutters back to life, it is still difficult to see the light at the end of the tunnel, but the market has bounced back before from other crises such as the 1990s recession, the global financial crisis (GFC) and the 2019 market downturn.
Real Estate Institute of Victoria (REIV) president Leah Calnan said the state’s property market was holding its ground, according to the latest REIV residential market index (RMX) figures.
In mid-March, the index was heading, potentially, towards new record levels, but this was based on prices recorded a few weeks before coronavirus restrictions came into effect.
However, since late March the RMX has been gradually declining because of significant restrictions enforced on real estate agents and house inspections.
“Victorian property prices have held firm during COVID-19, prices are higher than they were 12 months ago,” Ms Calnan said.
At the time of publication and based on March 2020 quarterly data, REIV said the median house price in Benalla was $265 000 versus $419 000 for regional Victoria and properties took on average 52 days to sell in the area.
The median rent in Benalla is $310 per week compared to $350 for regional Victoria.
“There are many predictions circling about real estate and the economy in general, but looking at what the actual data tells us, the Victorian market is weathering the storm well,” Ms Calnan said.
“At this time, prices are not as affected by the pandemic compared to sales volume, which remains much lower than expected at this time of year.”
Real estate agents are also experiencing a wave of new inquiries from Australians interested in moving from capital cities to regional areas, with research showing a "worst-case scenario" of a 30 per cent plunge in national house prices is possible if there is a second wave of coronavirus infections.
Buyers are looking to escape high-density living in favour of the lifestyle benefits and housing affordability and because they have gotten used to working from home during shutdowns.
If you have a secure job then you’re in a strong position as the overall market weakens, with many adopting a wait-and-see approach, because they simply don’t have income security to take out a loan.
People always need to sell for various reasons, but turnover is likely to decline, as people hold off putting their homes on the market.
So, will reduced supply cushion any potential price contractions?
Coronavirus is everywhere, so its effects are being felt everywhere, and 2020 is going to be a hard year, but the RBA is talking, hoping, for a rebound in the second half of this year.
“The Victorian market continues to show strong resilience, with the return of public auctions and easing of some restrictions, we expect the market to soon start gaining the momentum it lost due to the pandemic,” Ms Calnan said.
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