As the Federal Government prepares to relax some COVID-19 lockdown restrictions to kickstart the economy, real estate industries are getting ready to go back to business.
NSW and the Northern Territory were the first to lift bans on open for inspections and on-site auctions, and agents are wasting no time. Open houses and auctions will be held around the state from this weekend.
In other parts of the country, restrictions are starting to ease. In Queensland, inspections with up to six people, including the real estate agent, are now permitted, although in-room auctions and public open houses are still banned.
In Western Australia open for inspection restrictions have been relaxed, allowing up to 10 people to attend open homes and display village inspections, provided that record-keeping and hygiene practices are in place.
One of Australia’s most-loathed taxes could be scrapped as Australian leaders consider how best to cushion the economic blow from COVID-19.
Stamp duty is the added cost to buying a home that many Australians baulk at, especially for those in increasingly expensive capital city markets. But now the tax could finally be up for review as state and federal leaders leave no stone unturned in their attempt to support Australia’s economy post-Coronavirus.
Leaders around the country are joining in the conversation around whether or not the unpopular levy is an efficient revenue stream for propping up the economy post-COVID-19.
Stamp duty rates vary wildly from state to state, but homebuyers in Victoria and New South Wales pay the most stamp duty. So, if the latter state, which relies heavily on this revenue stream, decides to change its policy, it could lead to other states following suit.
For buyers, if stamp duty was to be abolished, they could soon find their next purchase to be considerably more affordable.
However, that doesn’t mean they wouldn’t wear the cost as some form of annual land tax seems the most likely alternative to stamp duty.
On-site auctions and open homes will return in the first stage of the Federal Government’s plan to ease coronavirus restrictions – a move the industry hopes will jolt consumer confidence and activity.
Real estate was flagged as a priority in the National Cabinet’s three-step plan to reopen Australia’s economy, announced by Prime Minister Scott Morrison on Friday, allowing public auctions and inspections to resume with precautions.
Phase one would allow gatherings of up to 10 people from next week, followed by up to 20 and then 100 in the second and third stages. Progress will be reviewed every three weeks before green-lighting the next step.
While the roadmap was agreed to by all states and territories, each one will decide when to roll out the changes.
Property Prices Post GFC Downturn
The coronavirus pandemic has significantly impacted the property market, with consumer confidence low and job uncertainty playing on the minds of buyers and sellers.
But while the length and severity of this downswing are unknown, experts suggest people should take a longer view of the property, as evidenced by the growth experienced in the decade following the Global Financial Crisis.
Cities like Melbourne and Sydney see price drops because of various things, but given that prices do tend to go up, it always pays to hold long term and kind of ride through the cycles as opposed to trying to pick the bottom and top of a cycle, which is very difficult to do.
There are widespread predictions prices will drop by up to 10 per cent or more in the coming months.
Is Now the Right Time to Buy?
As Australia, and the world, continues to grapple with the coronavirus crisis, it’s understandable that many homebuyers might be sitting on their hands, especially if their employment has been left hanging in the balance.
But for those with more security in their job and financial future, now might be a good time to get into the market.
It makes sense to me to be buying when a real estate market is at the bottom of a cycle. In this market, there’s certainly less competition for properties, particularly in those states which have closed their borders.
Will the Market Bounceback?
Homebuyers are set to be presented with a smorgasbord of options once coronavirus lockdown rules ease and sellers rush back to the market.
Many sellers withdrew or delayed putting properties on the market once the pandemic was declared and stringent conditions were established.
But vendors are preparing to list again after the National Cabinet announced a road map to easing restrictions.
Foreign Investment During Covid-19 Property Downturn
Victoria’s peak home building body is calling on the government to encourage cashed-up foreign investors to swoop on Melbourne in the aftermath of COVID-19.
Master Builders Association of Victoria has urged the government to suspend the 8 per cent in additional stamp duty taxes paid by foreign investors for at least six months as an immediate way to offer stimulus.
The FIRB report revealed Victoria remained Australia’s most popular state among all offshore residential property buyers in 2018-19, despite approved investment plunging from a peak of $28 billion in 2015-16.
The state’s 3163 approved applications to buy new and existing homes, vacant land and properties for development, worth $3.9 billion, made up 42 per cent of the nation’s 7513 authorised purchases, which were worth $14.8 billion.
Accruing the next biggest shares were Queensland (1343 approvals worth $1.3 billion) and New South Wales (1337, $3.1 billion).
Every inquiry made by an overseas investor is an opportunity to generate activity for builders and the many other businesses our industry supports.
At a time when attracting investment into our state economy is vital, this is an opportunity that should be considered.
Australia and particularly Victoria are well-positioned to rebound strongly from the virus and measures needed to fight it, cashed-up foreign buyers were likely to search for bargains here.
There is tonnes of money out there, and this isn’t a financial crisis — it’s a productivity crisis.