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The impact of COVID-19 on Melbourne’s housing market

10 mins read
melbourne house price

The pandemic brought by COVID-19 has impacted the lives of millions of people worldwide, including the way they buy, sell, and rent homes. Of course, this has created some unique challenges and changes to the housing market not only in Melbourne but also around the world. Nonetheless, this situation has created new opportunities for both buyers and sellers in Melbourne’s property market.

Melbourne is one of Australia’s most prosperous cities and is home to many universities, institutions, and industries globally. This makes the city a popular destination for students, professionals, families, and retirees alike. It is no surprise that its property market is an essential aspect of its economy, and its changes can have a rippling effect on various industries closely related to it. So what has been the impact of COVID-19 on Melbourne’s property market? Let’s dive in.

Changing Buyer Behaviors

As a response to the pandemic, buyers have shifted their preferences on what they want in a property. With more extended periods of staying at home, buyers have put more value on larger living spaces, outdoor areas, and natural light. They also place a higher value on homes that offer remote working capabilities, making home offices and fast internet access a top priority. Lastly, the pandemic has also made buyers more conscious of environmental factors, looking for properties with energy-efficient features and those that provide a more sustainable lifestyle.

Impact on Home Prices

The pandemic has had a mixed impact on property prices in Melbourne. Initially, there was a noticeable decrease in demand, coupled with the difficulty of hosting open houses and inspections due to the lockdown. However, as restrictions eased out, there has been a rapid rebound in buyer interest, leading to a higher demand for properties that meet the new buyer preferences listed above. As a result, house prices have gone up in some Melbourne suburbs, making it essential for buyers to do their due diligence before deciding on a purchase.

Rental Market Trends

The pandemic has negatively impacted the rental market in Melbourne as students and expats who once flocked to the city in droves are now staying away. This has led to a small year-on-year decrease in rental prices, especially in the inner suburbs, where most students live. However, there has been a significant uptick in demand for luxury accommodation and secondary homes as people seek to escape the city’s dense urban environment.

Government Response to Assist Homeowners

The Australian government has put measures in place to help homeowners and renters affected by the pandemic, which has helped to slow the pace of the economic slowdown. The most notable of these measures is a moratorium on evictions, which has been in place since March 2020. The government also implemented various stimulus packages to help those who lost their jobs, providing temporary relief payments to help them pay their mortgage or rent. These measures have prevented large-scale foreclosures and mortgage defaults, providing a safety net for homeowners and renters alike.

Technology has Been a Game-Changer

One significant impact of COVID-19 on the property market in Melbourne is the increased use of technology in the buying and selling process. Digital platforms like Zoom have revolutionized open houses and inspections, which can now be held virtually. Real estate agents are also using 3D tours and virtual reality to showcase homes, allowing buyers to inspect them from the comfort of their homes. The use of e-signatures has also made it easier for buyers to sign contracts remotely, making the purchasing process more efficient and streamlined.

Other Factors Driving the Market

Aside from the impact of COVID-19, there are other factors driving the property market in Melbourne. One of these factors is the low-interest rates set by the Reserve Bank of Australia, which has made it easier for buyers to take on larger mortgages. Another is the continued migration of people from other states and countries to Victoria, a trend that is likely to continue despite the pandemic.

What if I am a First-Time Buyer?

If you are a first-time homebuyer, it is essential to do your research before making a purchase. You can start by accessing our Guide to Buying a House in Melbourne, which provides valuable information on everything you need to know about buying property in Melbourne. The guide covers topics such as property market conditions, government incentives, and the buying process. All of these will help you make a more informed decision when buying a home for the first time.

FAQs

What are the property market conditions in Melbourne?

The property market in Melbourne is dynamic and ever-changing. Currently, there is a high demand for properties that offer more space, natural light, and outdoor living areas. These features have become a top priority for buyers seeking more comfortable living spaces during extended periods of working from home. Although prices have gone up in some suburbs, there are still opportunities to find the right property at the right price if you do your research.

How has the rental market been impacted?

The pandemic has led to a significant decline in the demand for rentals in the inner suburbs, leading to a drop in rental prices. However, there is still high demand for luxury accommodation and secondary homes as people seek to escape the city’s dense urban environment.

What government programs are available to provide relief to homeowners?

The Australian government has implemented several measures to help homeowners and renters affected by the pandemic. These measures include a moratorium on evictions, which has been in place since March 2020, and various stimulus packages to provide temporary relief payments to help those who lost their jobs pay their mortgage or rent.

How has technology impacted the buying and selling process?

Technology has been a game-changer in the property market in Melbourne during the pandemic. Digital platforms like Zoom have allowed for virtual open houses and inspections, while 3D tours and virtual reality have made it easier for buyers to inspect homes remotely. E-signatures have also streamlined the purchasing process, making it more efficient and convenient for buyers and sellers alike.

Is it a good time to buy property in Melbourne?

While prices have gone up in some suburbs, it is still a good time to buy property in Melbourne if you do your research. Buyers should look for properties that check all the boxes on their list of preferences and are still affordable. Working with an experienced and knowledgeable real estate agent can also help you find the right property at the right price.

What should first-time homebuyers consider when buying a home in Melbourne?

First-time homebuyers should consider several factors when buying a home in Melbourne, including the property’s location, condition, and price. It is also essential to research the market conditions and government incentives available to help with the purchase. Working with a reputable real estate agent who understands your preferences and budget can make the process much smoother and more efficient.

Conclusion

The COVID-19 pandemic has impacted almost every aspect of society, including the property market in Melbourne. However, as the city adapts to this new normal, it presents new opportunities for both buyers and sellers. With changing buyer preferences, technology adoption, and government assistance, the property market in Melbourne remains dynamic and ever-changing. By doing your research and working closely with a qualified agent, it is still possible to find the right property at the right price in this market.

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