How has buying property changed during the pandemic?
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The COVID-19 pandemic has forced the property market to adapt, from restricted open homes, online auctions, and the switch to digital communication over face-to-face. The recent Delta outbreak has resulted in further restrictions in NSW, with Greater Sydney under lockdown since the 26th of June. While restrictions are looking to lift with NSW approaching its vaccination target, there have been some major impacts on the process of buying a property that are expected to continue temporarily.
How have the recent COVID-19 restrictions impacted property buying?
The research process remains relatively unchanged. What has changed dramatically is the ability to thoroughly inspect a property and the shift from face-to-face to digital communication.
Communication with the agent
Due to the recent COVID outbreak and resulting restrictions, buyers must make contact with the real estate agent in advance of viewing an open home. Real estate agent Rosalie Gordon believes this has resulted in open homes being more exclusive.
“We are now screening the buyer before taking them through to open homes by asking what position they are in, whether finance is approved, if they are looking to buy property for investment or as a home, and whether they have already sold their current home.”
- Rosalie Gordon
Inspecting a property
Buyer’s agent Damon Parker believes the main change to buying a property during the recent lockdown has been the ability to inspect the property, as open homes are now limited to a five-minute one-on-one appointment with the real estate agent. Before, open homes could be viewed by 30 or 40 people in a 30-minute window; now, real estate agents can only fit six people in the same amount of time.
“It’s a pressure cooker environment. You need to fight to be one of the six, and of the six, be in the position of buying … You’ve got five minutes to make a million dollar plus decision!”
- Damon Parker
Not only are these 5-minute windows limiting as you aren’t able to inspect the property in detail, the one-on-one limitation makes decision-making harder if you’re seeking to buy a property as a family or couple as you are unable to inspect the property together.
Inspecting a property outside of your LGA is made more confusing by the vague NSW government restrictions. Buyers are more apprehensive about inspecting a property outside their LGA due to concerns about COVID transmissions and government regulations.
Property offers and auctions
According to Rosalie Gordon, buyers are now more likely to make high offers and vendors are more open to listening whereas prior to lockdown most listings would just go to auction.
All auctions are now online, and there are two main categories:
Auctions on the company’s platform
Auctions on the Zoom platform
The experience of an auction has changed dramatically. While before you could clearly see the vendor, agent, and buyer, that element has been reduced.
“Because we don’t have a public auction scenario, we can’t physically see what is happening. All the communication is digital and doesn’t have all the same nuances it normally would in a live environment where you can see, look, and feel the emotions and what’s happening in the auction. So as a buyer, you have far less control over the outcome.”
- Damon Parker
However, real estate agent Rosalie Gordon believes “People are embracing it … the main difference is the passion when you’re bidding at the house in an in-person auction. Even if you are the winning bidder, it’s difficult to get emotional for something on-screen.”
Despite the dramatic change from an in-person experience to online, both Rosalie Gordon and Damon Parker agree the transition to online hasn’t affected prices.
“There’s no correlation with price as it’s a methodology, not an outcome. The difference is that it’s a compressed, shorter process.”
- Damon Parker
What to consider when buying a property during the pandemic
Despite the limitations listed above, buying a property during the COVID-19 pandemic remains fundamentally the same. Market conditions have been impacted, but the overall process of researching, shortlisting, inspecting, obtaining a loan, and making an offer all remain relatively unchanged.
If you’re thinking of buying a property, these are some factors you should consider.
Get your finance sorted - make sure you have a good grip on your financial situation and are in a good position to enter the housing market.
Understand that your budget may change - make financial allowances for going over budget. You may begin your property purchase journey determined not to spend over budget, but Damon Parker believes that this almost always changes.
Don’t succumb to pressure - it is important that you are clear on the requirements of the property you want to purchase. Be careful of making offers as this gives leverage for the agent to raise the price.
Be sure of your decision - don’t let the market conditions scare you into buying a property that’s not right for you.
Thanks to:
Rosalie Gordon has worked in the real estate industry for over 30 years, and co-founded Planet Properties in 1992. She is very familiar with Sydney’s Inner West and is fascinated with the architecture and history of the area. For her, the best part of the job is the satisfaction she gets from negotiating the sale of a property and seeing the happiness and excitement of the vendors and buyers.
Damon Parker is the Principal of Street-Smart Buyer’s Agents. Street-Smart provides services for buyers ranging from a comprehensive property search, evaluation and negotiation through to bidding at auction. They also provide a seller’s advisory service helping prospective sellers evaluate the best marketing strategy and appointment of a selling agent.
