Six months ago none of us had ever heard of a Covid and few could point to Wuhan on a map. Now businesses are closed, we’re under curfew and suffering meat shortages. It’s fast becoming the year of the Vegan Hermit.
Needless to say, at Abercromby’s we’re done trying to guess what 2020 has in store for us next. We note, though, that the Premier’s daily Corona Virus press conferences are nowhere near as entertaining as the President’s. Our man doesn’t reveal as many wondrous antidotes, nor does he leave his Chief Health Officer bug-eyed and gasping for air like a fish on a pier. Lift your game, Dan.
Though auctions are forbidden until we emerge from Stage 3 Restrictions, this hasn’t prevented sales from marching on in remote form, despite the virus and its effects. It’s just a different way of doing things, adaptation, evolution and perseverance - that’s business. So we’re pleased to announce that in these trying times, the discreet methodology we’ve always advocated has come into its own and July has been a record month for properties sold by Abercromby’s.
The market has endured very minimal reduction in value for established and upper-end homes in the inner Southeastern suburbs of Melbourne. This traditionally robust socio-economic zone is proving, once again, that it is not as vulnerable to short or medium term economic challenges as other neighborhoods.
We believe that the predictions being made in the press of substantial falls in value are not warranted, particularly regarding the esteemed neighborhoods in which Abercromby’s functions. Panicky cries of 20%-30% falls in value are just clickbait put out there by attention seekers.
Any decline is likely to be in the 5%-10% range from pre-Covid levels, and largely confined to suburbs where the population has its finances locked into a regular wage pattern that has been disrupted by the lockdown.
In the long term, record low interest rates make buying real estate historically inexpensive. No prospective investor is blind to that. Our communications with clients tell us that many potential buyers are waiting for more homes to come on the market, and we expect them to reveal their enthusiasm in spring.
PROPERTY MANAGEMENT UPDATE
Abercromby’s has been exceptionally busy renting out houses of two, three, and four bedrooms that have been renovated or are new, in a price range of $700 to $1,000pw. There is great demand in the market for these properties so please contact our friendly property management staff if you have a home to rent in this category.
The apartment market is somewhat slower than normal, largely due to travel restrictions and foreign students and workers repatriating during the pandemic. As a result landlords do need to meet the market at its current level. It will re-establish itself when the foreign nationals return.
A desire for comfortable isolation (Yes, isolation comes in many varieties. Who knew?) has meant that discreet properties with outdoor space are in greatest demand at present. Renovated and modern homes are everyone’s favorite right now, particularly with lifts and balconies.
Things are never as bad as they seem, nor as good as they could be. Another six weeks in the bunker is likely to be very tough on wage-earners and small business owners, which will inevitably have an effect on the less prestigious end of the real estate market. But from what we’re seeing Covid-19 would need to run a long race indeed to seriously dent the prestige market. The probability is that vaccines will kick in before a substantial market reversal.
Meanwhile we’re hearing a lot of comments that go along these lines: “Who wants to drive into the CBD if they don’t have to? I get an extra couple of hours a day by working from home. But maybe if it’s home-and-office instead of just home it needs to be bigger.” This might indicate that one long-term effect of the pandemic will be a drift of capital from Collins Street to Stonnington.
If things go well and we comply with the lockdown rules, in another six weeks we will witness the conjoined energy or lockdown release and spring. Houses will come onto the market, and buyers will be out and about burning shoe-leather and the excited soliloquys of auctioneers will once again ring through the streets.
This is predicated on us beating the Covid, of course. As Muhammad Ali said before The Rumble in the Jungle, ‘I can be a representative of my people. I can lead them to freedom. I can raise them up... All I go to do is whip George Foreman first.’ And all we’ve got to do is whip Covid-19.
Heartfelt wishes from all here at Abercromby’s in this testing time. Spare a thought for business owners who are shut down, spare a thought for the elderly who are shut up. Make a phone call to your mother, organize a Zoom catch-up with your Dad, text the sister you haven’t talked to in a while. Stay safe and healthy.
And remember we presently have an unsurpassed selection of properties for sale, so if you’re in the market give one of our friendly sales staff a ring (after ringing your Mum).