Property in a post-COVID world

It’s been a challenging 22 months since Australia’s first confirmed case of coronavirus back in January 2020 – but there is light at the end of the tunnel.

As more countries continue to embrace “COVID-normal”, increased vaccination rates are now enabling our states and territories to follow suit, in line with the plan developed by the National Cabinet earlier this year.

This roadmap is underpinned by a commitment to transition away from “pre-vaccination” settings, which focused on suppression of community transmission, and toward “postvaccination” settings, with significantly eased restrictions.

Locally, New South Wales and Victoria have been the hardest hit jurisdictions over the past two years.

And all eyes will be on the pair as they complete wholesale re-openings in the coming weeks.

But what can we expect within these traditional powerhouse property

markets in the months ahead, as we seek to recover from the pandemic?

There are noteworthy observations to be made from our international colleagues.

Much was made of the UK’s ‘Freedom Day’ back in July 2021 – but indisputably, one of the key trends in recent months has been a remarkable real estate boom.

Dubbed the ‘race for space’, house prices in the UK experienced the strongest month-on-month rise for 14 years in September 2021, according to major lender Halifax.

The latest monthly data represented an all-time record for dwelling values and saw a 7.4% spike year-on-year – demonstrating a clear post-COVID boom.

There’s been heated debate in Canada, particularly in the lead-up to its recent federal election, about its current housing crisis. A common view held is that prices are being driven up by a lack of supply.

However, data from the Canada Mortgage and Housing Corporation (CMHC) indicated that home completions started to outpace population growth last year.

And by the fourth quarter of 2020, 18 homes were being built for every person the population grew by.

What’s most notable, is that while September saw some stability return to the sector, property prices have continued to soar throughout 2021.

The Organisation for Economic Cooperation and Development (OECD) is made up of 38 member nations.

And just three of these endured house price falls in the first three months of this year – the fewest since the data series was first captured in 2000.

Record low interest rates and the desire for a change in lifestyle are certainly stirring up buyer frenzy.

Sales settlements in New South Wales and Victoria were down on the previous quarter, but up year-on-year in September, per the latest data from PEXA Insights.

It’s worth noting that unlike other countries, thanks to Australia’s digital property exchange capabilities, transaction volumes were able to be sustained in spite of restrictions.

But with the worst of the lockdowns seemingly behind us, the Spring high season not yet over and clear surges having been witnessed abroad upon progression to a COVID-normal world, it will be fascinating to see how our market behaves in the months ahead.