Our Nineteeth Month - Mar 2020

I've always found that the market is driven by one thing, and that one thing supply and demand.

Date:

04-Apr-2020

Category:

Ecology

Tags:

Author:

Matthew De Maid

Our Nineteeth Month - Mar 2020

I've always found that the market is driven by one thing, and that one thing supply and demand.

When I sit down to write a blog post each month (admittedly, at varying stages of each month), my focus is to always write about things a little more "exciting" than listing and selling; something a little bit more topical or something a little less generic. Admittedly some months that gets a little difficult as ultimately our job is to list and sell for people; March 2020 was not one of those months.

March started in a relatively normal way; with the exception of Louise starting officially on Monday 2nd March and we were all rushing to have the 'Three Drummond' project styled and on the market. Enquiry was still very strong and we had a number of our existing sales finalising (including 33 Reis Road East, Highfields at $782,000 and 20 Bridge Street, East Toowoomba at $725,000); plus several others. Everything felt pretty normal really.

Fast forward to around the middle of the month or a little after (my birthday was the 15th and it was after that) and everything started to change amid talk and media coverage of the Coronavirus. Over the years I've trained myself to always see the positives of situations; so as the talk started emerging I was thinking that we might be in for a strange two to four weeks and then we would be on our way again. Unfortunately as each day passed, this got more serious - and quickly. What began as a short term pause, reflect and plan session - quickly evolved into the immediate need to preserve health, family and longevity of careers.

I think it's safe to say that no one has ever had to deal with something like this, at least not anyone who I know. The diversity of the challenges and impact of this is so widespread that at first it was very hard to fathom what was going on and I think that's what made the first week or two of the virus so volatile for everyone. We had no time to prepare and no time to adjust... everything was unknown and people genuinely felt scared. My response has a business owner and an employer was to make sure my immediate people felt safe; my family, my staff & their families. As far as day to day operations go; we stopped doing open houses about a week sooner than it was mandatory to do so, it just felt like the right thing to do - health before wealth. Otherwise; we made the decision to close our little office and start working remotely from Wednesday 25th March.

As I said above, the initial "knee jerk" reaction was the hardest to deal with - some buyers became stressed about the decisions they were making and sellers started questioning their timing. Some people in both cases electing to sit on their hands and wait it out. On the other hand, some people were acting with angst and rushing to either purchase or sell, before any potential impact on the broader market. Directly after this initial response there was almost an eerie pause for a few days; very few phone calls, very few emails - just quiet. I'm assuming people were just adapting to the situation and taking in all the information they could. Spending time with their families and making sure their household was prepared as well as possible; and rightly so, I was doing the same.

This week as I write this, some confidence is returning; it's not so quiet and people, in general, seem to be getting more comfortable with our collective, current predicament. I have sellers and buyers reaching out to me again; sellers are asking about the market & the timing, buyers are asking about upcoming stock - which leads me to my current take on the market...

Some people are scared and are happy to do nothing for a while, I understand that; however I'm also starting to see the effects of limited supply creeping back into buyer sentiment and sellers starting to acknowledge that. Property is a complex thing to judge, it's also not a fast thing to move - transactions take time and there are people involved (meaning there are emotions involved), making it a lot more stable than some other assets which can see erratic up and down movements on any given day.

I've always found that the market is driven by one thing, and that one thing supply and demand. When you consider that in our current situation we have sellers deciding not to list just yet because it's 'too uncertain' and we have buyers waiting as well; it creates a fairly balanced overall situation (obviously just fewer transactions happen).

The only time we should see downward pressure on pricing is if supply outweighs demand and we start to see vendor discounting because of added competition. We're a sales only based agency and I know that there's been a lot of talk about the property management side of things - but I'll leave that to those more qualified to comment on it. From my side, I'll just continue to monitor the supply and the demand, because I think different sectors of the market will respond differently to this current situation; it definitely won't be a "one size fits all" approach like some people initially think.

I'm also very interested to see the effect that spending a lot more time at home will have on people; it's easier to ignore the things you don't like about a property when you're not there as often. Will this lead to a shift towards more "lifestyle" and "sustainable" type properties? Time will tell.

What we do know, is that the way buyers and sellers consume property information will change immediately and I think, forever after. There will be more pressure than ever to supply quality information via online media; with people wanting to know more in-depth detail about a property before electing to physically view it. Video walkthrough, interactive ideas and a flexible approach will replace the tried and true "open houses" for at least the isolation period; and if that's for six months or more - people will adapt to this as the new normal I believe.

A huge blog post this month, thank you if you've made it this far. As a business we're going to continue to try to provide comments on the current state of the market, while also focusing on the same things we always have; customer care and all the things that strengthen our clients' position in the market at any given moment.

Take care out there and stay positive. Look after the ones you love and enjoy what you have.

- Matt