The last 12 months have been challenging for everyone globally. In Australia, it hasn’t been any different. As COVID-19 caused Melbourne to enter a lockdown and borders to close in late March 2020, restrictions started to impact our day-to-day lives. 

Travelling between individual states was prohibited for much of the year, and most of us were left wondering when normal would return, if ever. Then in July, Melbourne entered a four-month lockdown. 

Inspections and auctions were cancelled. Those of us looking to buy, sell or rent properties were suddenly left in a position of uncertainty, with nobody knowing exactly how it would impact the housing market. Encouragingly, Melbourne hasn’t seen a decline in the real estate sector. Even with a short but third full lockdown for five days in February 2021, it’s continued to flourish despite the challenging local and global situation. 

Now that COVID-19 restrictions are finally starting to ease as we approach the second quarter of 2021, we’re all seeking a better understanding of what will change and how it’ll affect us. This article will answer those questions, so join us as we explore how the easing of COVID-19 restrictions impacts your property and the market as a whole. 

What Restrictions Are Changing and Why?

In the state of Victoria, property prices haven’t stopped increasing. With the end of the pandemic in sight, shattering records is becoming the norm. The median house price in Metro Melbourne for the Dec 20 quarter hit $941K. There’s an expectation that we’re about to see a further sustained boom in the real estate market, and median house prices could reach well over $1Million next year. 

Despite Victoria entering a brief lockdown in February, COVID-19 cases started to ease towards the end of the month. The state-led Pfizer vaccine rollout also began in earnest on the 21st of February 2021. It’s the first time we’ve been able to see the light at the end of the tunnel, and it’s excellent news for those looking to sell their properties. 

Let’s take a closer look at the current restrictions so you can keep yourself on the right side of the authorities and help protect your community.

Inspections

Home inspections are acceptable under current rules, but agents are obligated to follow some guidelines to avoid violating the restrictions. Open homes are allowed, but agents need to make sure they manage the numbers. 

Open Houses are only permitted if they meet the one person per four square metre density quota in the suburbs, and children under one don’t count. Masks are still mandatory inside, and if social distancing isn’t an option outside, you need to wear one there too. 

The most crucial aspect to keep in mind is that your real estate agent must have a COVIDsafe Plan. Although this isn’t your responsibility as a buyer or seller, the best businesses will make it clear what they’re doing to manage COVID-19 related risk, so don’t be afraid to ask. 

Auctions

If you’re a vendor and looking to auction your property, you need to consider a few critical factors. It’s possible to set up an auction, but you need to be aware of a few restrictions. It’s best to ensure your agent has electronic record-keeping capabilities, as this drastically increases how many potential buyers can attend. It’s worth checking, as it doubles your exposure to buyers. 

One person per two square metres passes the regulations if the agent makes electronic records. Manual record-keeping agencies can only allow one person per four square metres, which isn’t ideal for those looking to sell at the best possible price. The same rules apply to infants attending auctions as they do for house inspections, so those under one don’t count. 

The rules on masks are the same too, so take that into account when you’re making the arrangements. Make sure you check that your agent’s COVIDsafe Plan is in operation for auctions as well. 

What COVID-19 Restrictions Could Change Next 

As we see the vaccine rollout progress and new infections continue to stay close to zero in Victoria, more real estate restrictions should be lifted. How that will impact the housing market is still up in the air, but we have a few predictions of what’s most likely to change. 

Suburban Rental Prices

Low rental demand in the suburbs and an increase in listings mean more properties will enter the market. This could be fantastic news for those looking to rent but not so favourable for landlords looking to maintain their expected ROI.

Premium Suburbs

Premium suburbs have been the standout area of the market throughout the pandemic, with prices staying the same or increasing despite lockdowns. This is partly due to the lower proportion of rental housing available, but it’s also a result of the perception that properties in premium areas better hold their value.

Auction Numbers

Auctions have continued throughout the pandemic, with online auctions taking some of the pressure off. Of course, the numbers are much lower at around 60% of pre-pandemic volumes, but we expect the rate to bounce back over the coming months. 

As confidence returns and infection rates drop, we could see an increase in activity as vendors look to make up for time lost. 

Foreign Investment

This is one area that isn’t going to bounce back as fast as everything else in the real estate market, and we’ll have to come to accept that. International property investment has been hit hardest by the COVID-19 pandemic, and it’s likely to be quite sometime before this changes for the better. 

Domestically, the situation will improve fast, but you’ll have to wait a while for that overseas money to start coming back into the market. 

The Bottom Line

As the COVID-19 restrictions ease, the real estate sector will start to return to normality. Melbourne and Victoria’s properties have continued to do well on the whole despite severe lockdowns and regulations, and it’s an exciting time for those looking to sell. 

All the signs point towards a sustained boom, which means prices and demand are set to increase in the short and medium-term. It’s a fantastic time for everyone involved in the industry, and we can’t wait to watch it unfold. 

Author: Andrew Majdlik [$Million Dollar Listing Agent]