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The economic impact the coronavirus (COVID-19) has had on the economy can be expected to slow the property market, REIA president says.
In a statement, REIA president Adrian Kelly said the real estate industry should be aware of what impact the coronavirus could have on the property market.
“It is more likely our markets will be affected by reduced consumer sentiment than the actual virus itself. I am already hearing of many stories whereby potential vendors are deciding not to sell at this time, preferring to wait until things normalise,” he said.
“While such a notion is completely understandable, it doesn’t make sense as we all know it is better to sell in a market with less competition, and I have no doubt that our buyers will continue to purchase regardless of how the seller may be feeling.
“I suspect any reduced consumer sentiment is likely to be magnified in the larger cities than in regional parts of Australia, just as the nonsensical rush to buy toilet paper has been.
“I have no doubt that once this situation is managed and under control, our markets will return to normality just as they did after the bushfires earlier in the year.”
Real estate agencies have already started to explore options where agents can still conduct sales while reducing the risk of being exposed to the coronavirus.
Last week, McGrath announced it would trial a safe working environment for its team at its Pyrmont headquarters and six of its Sydney metro offices for 24 hours today (Monday, 16 March).
“While we have not been impacted internally, we want to proactively plan and test our operating systems to ensure our business continues to run smoothly and effectively should the need arise to work remotely,” McGrath CEO Geoff Lucas said.
“We believe this is a prudent and wise measure to mitigate the risks of spread of COVID-19 in light of the World Health Organisation’s advice for governments and businesses to step up their containment efforts.”
An update from the Department of Health on 15 March stated there were 249 confirmed cases in Australia, and three deaths. However, Sunday evening there were reports a 77-year-old woman died from the virus.
As of Sunday, there were nearly 156,000 confirmed cases around the world, according to the World Health Organisation, and almost 75,000 people had recovered from the virus.
From Monday, the government announced a 14 day self-quarantine period for anyone entering Australia, as well as a ban on non-essential, organised gatherings of more than 500 people, but that has not slowed down the momentum of auction clearance rates at the weekend.
“Our results are consistent with the momentum of recent months, particularly February where the Ray White Group achieved personal best auction results for its clients,” Ray White Group managing director Dan White said.
The franchise reported an average clearance rate across Australia and New Zealand of 67.5 per cent, with a strong 85 per cent clearance rate in Sydney on Saturday, and a 68 per cent clearance rate in Melbourne.
Last week, Prime Minister Scott Morrison announced a $2.4 billion national health response plan. And he also revealed a $17.6 billion economic stimulus plan to ride out the economic impact that has resulted from the spread of the coronavirus.
The plan includes the government subsidising half the wages of 117,000 apprentices in small businesses, and increasing tax incentives for companies to continue to invest and buy new equipment.
The Housing Industry Association (HIA) welcomed the support for apprentices, as this will ensure the housing market does not take a backwards step, HIA chief economist Tim Reardon said.
“The construction industry employs over 1.1 million people, with residential building work generating over $105 billion for the Australian economy in 2018 and accounting for 5.8 per cent of expenditure in the Australian economy,” he said.
These measures will assist in stimulating household demand and prevent a further slowdown in building activity, Mr Reardon said.
In a speech last week, Mr Morrison said he would continue to keep Australia updated and make decisions based on the best medical advice.
“Once the virus has run its course, we are making sure Australia can bounce back strongly,” Mr Morrison said.
“I know, many Australians are anxious about this and we still have a long way to go. But be assured we are taking action and we have a clear plan.
“The months ahead will present many challenges, and we will respond to them.”
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