Fear and uncertainty over coronavirus will test Sydney’s rebounding property market this weekend.
- There are due to be 907 auctions taking place across Sydney this weekend
- Sydney buyers’ agent says securing new loans could be a challenge
- Those in secure jobs could potentially find good bargains
The 907 auctions due to be held across the city will be closely monitored for early indications of the impact coronavirus could have on the real estate market.
CoreLogic forecaster Kevin Brogan said while there had been an increase in activity in recent weeks, the outcome of today’s results would give an insight as to the confidence, or lack thereof, in the market.
He said an extra interest rate cut by the Reserve Bank would normally be greeted with optimism by prospective buyers.
But Mr Brogan said the current economic forecasts and extreme uncertainty made it unlikely to provide a boost in prices.
“The factors that are going to weigh most heavily on people’s minds are around confidence,” he said.
“We’ve seen confidence and employment certainty dropping.
“You’re definitely going to see participation rates in the market slow down as people wait to see what’s going to happen next.”
Sydney’s final auction clearance rate fell to 68.1 per cent across a lower 767 auctions last week down from 75.2 per cent the week before.
But it is still significantly up on the same time last year when only 54.2 per cent of properties cleared.
Sydney buyers’ agent Kim Ball said prices would fall but the full scale of the declines won’t be known for some time.
“I think there will definitely be a price retraction and the market evidence shows us we have been through dips before and the market does bounce back,” she said.
“This is unprecedented — we haven’t been through anything like this before and I think anyone who says they do know what’s going to happen now isn’t telling the truth.”
Second wave of economic chaos
The coronavirus outbreak is expected to cost the Australian economy billions, with the second-order impact to be felt across supply chains, as many factories remain closed in China.
Some of the major banks have indicated they will allow eligible mortgage customers the chance to defer repayments for up to six months to deal with the crisis.
But securing new loans could be a challenge.
“If there are widespread job redundancies that might come into distressed sales,” Ms Ball said.
“Again, the big banks are talking and there might be mortgage relief — no one knows yet.”
The states also agreed to work on how relief could be provided to tenants in both commercial and residential tenancies over the next six months.
“Most businesses will be affected by this in a negative way,” said Ms Ball.
“Landlords will either have to decide whether they terminate their lease and then they have no tenant, or whether they try and give their tenants a rent-free period to try and sustain them.”
Stay up-to-date on the coronavirus outbreak
- Download the ABC News app and subscribe to our range of news alerts for the latest on how the pandemic is impacting the world
But she said those in secure jobs and who have liquidity could potentially find some good bargains.
“If you are a buyer, there is no rush to buy.
“However if you’ve got cash or you’ve got finance approved and your job is secure then you’re in a good position to take advantage of opportunities when they arise, and they will arise.”
The key for vendors is to make sure people actually turn up.
Open inspections and auctions will be practicing social distancing measures today, with some agents allowing no more than four people in at a time or even offering private property inspections and more video presentations where possible.
What the experts are saying about coronavirus:
- Coronavirus pandemic could see house prices plummet by 20 per cent, economists warn
- ‘I know how bad it will get’: Doctor uses SARS experience to protect cancer patients
Bidders will also be separated and most agents are looking to increase live streaming of auctions and phone and online bidding options.
Sydney Auctioneer Clarence White is conducting 14 auctions this weekend but expected fewer onlookers coming onsite to watch the action.
“For example, we use Gavl (an online bidding platform and streaming app) so someone can watch the auction from home,” he said.
“We would then make available the option for someone to phone bid, or if agents want to go to the next step, those apps can be allowed for online bidding.”
Ask us your coronavirus questions