The COVID-19 crisis came at a shock to the whole world. What everybody thought would be concentrated in a province in China (Wuhan) has spread throughout different parts of the world, the worst-hit countries being Italy, the USA, and the UK. Worldwide, there are now over 3 million confirmed cases of COVID-19: half of that number has recovered, and over 200,000 has died.
Australia has not been spared from the pandemic as well, but is relatively doing better than others in terms of crisis response. Australia has seen 6,849 confirmed cases, 5,889 recoveries, and 96 deaths. It’s even beginning to look as if Australia is over the worst and is on the way to flattening the curve.
But just because the COVID-19 pandemic is a health crisis does not mean it does not affect other aspects of human activity. With social distancing measures in place, establishments have temporarily closed down and mobility has been limited. With mobility and human activity on a long pause, everything else will be affected by this pause as well.
The Australian property market is definitely not exempted from this, much to the dismay of residential builders in Melbourne. This is going to affect many in the building industry, even the best builders in Melbourne.
However, it’s obvious that this pause is temporary, and there’s assurance that home building will not lose its market. As soon as activity resumes, the home building industry will simply pick up where it left off.
The link from pause to resumption will be explained in this article. Read on to find out how the home building industry and home prices are going to be affected during the COVID-19 pandemic.
House Prices Are Holding Up, But Property Transactions Are Decreasing
House prices in Melbourne have increased by 12.5 percent at the beginning of the year, and properties in Melbourne stay up on the price range. To the credit of the best value builders, Melbourne is known to be the property auction center of Australia. But despite the ban on events like public auctions, property prices are holding strong.
Even then, there’s a significant decrease in property transaction, meaning buyers are not moving their pegs as much as before. There are a number of possible reasons for this. First, the most obvious reason is that buyers are affected by the reality of unemployment or paused economic activity that has affected Australia’s working population. Due to businesses being closed, people’s income has seen varying degrees of decrease. With the uncertainty of the times, consumer confidence falls as well – nobody really feels like making an investment as big as real estate at the moment, especially since a pending recession is underway.
The second reason could be that property prices are simply staying high, period. Property discounts have not changed much, which keeps the actual cost high. With property auctions out of the picture, there’s not much room for active and busy property transactions to take place.
At best, buyers and sellers can opt for private negotiations, and this is still difficult to do with the stay-at-home protocol in place. Plus, buyers are generally discouraged to purchase without seeing the property in person, so video tours put up by agents may spark interest but not necessarily make a sale.
What this means for the home building industry and for residential builders in Melbourne
This means that it does not look as if building new is an option at this time. Existing properties may be bought only by those who need to live somewhere: those who had only recently moved out of their home right before the crisis, those who now live in a new property but still have an old property they need to sell as soon as possible, those who need to rent someplace else. There’s going to be some transaction going on, but it’s more of a needs-based transaction.
This also means that the real estate market activity will only slow down temporarily. If anything, this pause will only build up a desire in people to start looking, transacting, home viewing, building, and buying as soon as restrictions on mobility are relaxed. For now, buyers are focused on staying in the home or dwelling that they are already in.
Why is this assurance so reliable? It is because the COVID-19 crisis is a public health crisis whose effect on the economy is latent, meaning it simply did not mean to ruin other aspects of people’s lives. It is not a financial crisis where there is a clear correlation between income or profit and therefore purchasing power. In post-financial crisis recovery, getting the economy back on track would be an inter-institution effort: governments, banks, etc.
For this pause in property transaction, however, it is generally safe to assume that resumption of activity will get everything in order naturally. Institutions may still be involved, but not in the scale that they would be, had this been an actual financial-lead crisis. Waiting it out would be best for builders in Melbourne.
Be prepared for resumption
If your plans to hire the best value builders in Melbourne for a new real estate project were laid on the table due to the COVID-19 crisis, there’s absolutely no need to fret. Simply find out who the best builders in Melbourne are in your opinion, and continue discussing, albeit virtually. As soon as activity and personal interaction is allowed, you can then begin moving your project forward.
What the COVID-19 crisis has also made many people realise is how important it is to have a beautiful home, one where you can feel comfortable and happy even when you stay in it 24/7. For so many people, it is their first time having to stay home this much. They then realize the benefits of staying inside a place that reduces your stress and anxiety. Crisis or not, staying home must be an enjoyable experience.
Thinking about Australia’s real estate is really not just about the numbers but about the concept of a home itself. The best value builders in Melbourne offer renovation services as well. As soon as things get back on track, feel free to either look at new real estate or improve the one you already have.
Get in touch with your local residential builders in Melbourne today, Millenium Homes
We remain steadfast in our promise: to build beautiful homes for you. Call us at +61 400 811 731 or email us at email@example.com.