The coronavirus pandemic is forcing Australians to stay in their homes, creating a confusing situation for those trying to buy or sell property.
For many, their home is more than their castle – it represents the biggest financial asset most people own.
As of March, Australia’s residential property market was worth $7.2 trillion, according to the latest ABS data.
Established and aspiring home owners are now rightly concerned the coronavirus pandemic could dent this critical market and have a lasting effect on their finances – with economists suggesting prices could fall by as much as 20 per cent if one in 10 Australians lose their jobs.
Can I still buy or sell property during the pandemic?
The short answer is yes – there are no restrictions specifically preventing you from buying or selling a home.
But that’s not to say sales will progress as normal.
The federal government has paused on-site and in-room auctions and banned open house inspections for the foreseeable future.
In response, the real estate industry is taking its lead from the thousands of Australians working from home and finding innovative ways to keep the market operational.
Can I still inspect property amid coronavirus fears?
Potential home buyers would rarely put their money down without inspecting the property first, but social distancing rules will make that a little more complicated.
Open inspections have been banned outright for the time being, but agents will still be able to conduct digital tours of the property using videos and live-streaming.
And if they like it enough, buyers will still be able to book private inspections – although they must adhere to the government’s social distancing rules.
That means standing 1.5 metres apart from others and never having more than one person per four square metres in any given room.
Can I still put my house up for auction?
Prime Minister Scott Morrison has put a pause on on-site and in-room auctions until the outbreak is under control.
But sellers can still sell their homes via virtual auctions.
These come in a range of formats, but essentially operate the same way as a normal auction would, with an auctioneer working to get the highest price they can from a group of potential buyers bidding in real time.
Instead of being physically present, however, those buyers instead make their bids via their computer or phone.
What should I consider before buying or selling?
Transactions can still go ahead, but AMP chief economist Shane Oliver cautioned sellers that now is “probably not the best time” to enter the market.
“There’s probably not a lot of buyers out there,” he told The New Daily.
“I think a lot of selling will dry up too because people will think that now is not the time to move.
“People will feel that, given the shutdown, it’s an unnecessary risk to take to participate in property transactions, which involve coming across a lot of people.”
With unemployment climbing, Mr Oliver said these factors will push property prices down between 5 and 20 per cent during the coming months.
But recent moves from Australia’s major banks – specifically to offer vulnerable customers a pause on mortgage repayments – should ease some of the pressure by limiting the number of forced sales.
“Five per cent falls were contingent on a mild rise in unemployment. Twenty per cent was contingent on a bigger rise; a doubling in unemployment,” Mr Oliver said.
“The banks have announced payment holidays for people affected by the coronavirus so that might take some of the pressure out, which could lead to price declines being less than 20 per cent even if unemployment gets to 10 per cent and beyond.”
As for purchasing property, buyers should weigh up the risks associated with taking on large amounts of debt during an economic downturn.