Residz Team 6 min read
Life might appear to be going back to normal, but the property market is changed forever. Whether it’s a sea-change, a move interstate, online research, or homeschooling, the Covid-19 pandemic has transformed our choices in, and habits around, buying and selling real estate. In this article, we look at whether the transformations are tipping points into a new permanent state, or nothing but temporary ‘blips.’
The blurring of work and home is the stickiest change to come out of the pandemic. It’s no longer about ‘where’ you work, but ‘what’ you deliver. A recent Families in Australia survey found 67% ‘sometimes or always’ worked from home, compared to 42% pre-Covid. White-collar workers on laptops have done a rethink on where they work and how they work, putting location choice and flexibility at the top of employment wish lists, and daily commutes near the bottom. The office these days is where you are happiest.
Verdict: Permanent
Who wants to live in a squeezy city unit during a pandemic lockdown? Plenty of renters showed they didn’t. Thousands of city apartments were emptied during Covid as international students flew out of the country, remote workers opted for lifestyle locations, and the suddenly-unemployed packed up and went home to mum and dad. As some international students trickle back and life returns to CBD, vacancy rates are falling. First home buyers, priced out of the suburbs, are coming in too. However, squeezy apartments will never be quite as attractive as they were pre-Covid.
Verdict: Permanent
Wind in the air, sand in the hair. Since Sigrid Thornton’s character Laura moved to Pearl Bay for her seachange in 1998, Australians have dreamed of doing the same. But few working age buyers actually did it until the pandemic made it possible. Once flexible work came, coastal and country homes suddenly became the darlings of property. A net 43,000 Australians moved to regional areas from capital cities in 2020, up from 18,900 in 2019 (Australian Bureau of Statistics May 2021). Remote work becoming ‘the norm’, plus positive reports from those who’ve bought spacious houses and settled into communities, will see this trend continue.
Verdict: Permanent
Getting out for a walk in the fresh air was one of the few things you could do during the pandemic lockdowns, and those who could walk to villages and takeaway cafes (and see other people!) fared the best. Prices of homes close to popular coastal villages such as Byron Bay, Avoca, Yamba, Airlie Beach, Apollo Bay, Broome, Eden, Manly, Port Douglas, Port Fairy, and Mornington soared to mind-boggling levels. In 2021, $2 million to $4 million in some of these towns won’t get you more than a basic home. Not needing a second car, though, means the garage can be converted to a home office or granny flat. All in all, we love village life.
Verdict: Permanent
As fast as international students flew out of Australia in 2020, expats were trying to fly back in. Covid-19 was declared a pandemic on March 11 2020, and from that moment until January 2021, more than 446,000 expats returned to Australia. A lot of them bought real estate, much of it in Sydney, fueling a property boom already underway thanks to low interest rates and government incentives. With international borders opening up, more visitors will come. However, Australia’s brand may have been damaged during Climate Conference Cop26, lending policies for home loans have tightened, and home supply will start to catch up with demand. Most of the banks predict an easing of property prices within the next two years.
Verdict: Temporary
Australians have long tended to “drift north” to chase better climates. But as many as one in five first home buyers (about 2360 Australians a month) now think about buying a property in a different state to the one that they currently live in. The Finder First Home Buyers Report 2021 finds first home buyers in NSW (the state with the most expensive housing) are the most open to buying interstate (24%), and keen on ACT or Queensland.
As well, 19% of Queenslanders and 17% of Victorians would consider a move to ACT or NSW. Research tools like Residz.com give buyers more confidence by instantly showcasing relevant data about suburbs anywhere in Australia. Whether as an investment or to live in, interstate buying no longer feels scary.
Verdict: Permanent
Proximity to an employment hub was once the key to choosing a great location to live in. That’s largely gone out the door thanks to the pandemic. So, other attributes are elevated. These so-called lifestyle factors are as wide-ranging as top schools, crime rates, amount of open space, flood and bushfire risk, neighbour demographics, pollution, and noise levels. Finding detailed data on these factors used to be time-consuming, but is now instantly attainable for free at Residz.com.
Verdict: Permanent
Having a home office pre-pandemic was a ‘nice to have’ not a ‘need to have’. That’s changed. Homes with a dedicated home office are more attractive than ever, especially if they have creature comforts like air-conditioning, noise abatement, and technology (eg. high speed network, stand-up desk, room for second monitor, flattering lighting etc). While video-call technology can trick up backgrounds from New York lofts to waving palm trees, having a quiet space and room to move is the very least we’ll settle for.
Verdict: Permanent
If you can work from anywhere, you’re qualified to join the growing number of digital nomads. After Covid, they've grown in number and many will use this opportunity to move overseas. For Australia, the closest appealing hubs would be South-East Asia and South Pacific. Others might move back and forth, returning home every few months rather than having a permanent base. That will have flow-on effects on the rental market in both countries, in terms of lease term length and price.
Verdict: Permanent
One trend that pre-dates Covid is the rise in popularity of homeschooling. Fewer than 10,000 students were homeschooled in 2014. Now 26,000 kids are homeschooled (not registered with a government or private school). Tasmania has the highest number at 14 per 1000 (the average is around six per 1000). Having trialled and enjoyed homeschooling during the pandemic, many parents might take up long-term RV travel around Australia while they work and teach. This could help far-flung towns and economies but may strain infrastructure such as camping areas, national parks, and minor roads. As towns respond, more travellers will arrive.
Verdict: Permanent
Covid restrictions and conditions, working from home, high mortgages, and an improved lifestyle may see less demand for major holiday breaks each year. This could mean more “staycations”, weekends away, and road trips, rather than 4 – 6 week interstate or overseas holidays. Property investors hoping for holiday letting income (such as via Airbnb or Stayz) will be relieved if this is the case. Many forked out a fortune as holiday spots got super pricey in the pandemic and FOMO (fear of missing out) set in.
Verdict: Permanent
Listing, inspecting, and buying real estate underwent a huge digital transformation during Covid. Online auctions were used during lockdowns. Most involved an auctioneer on Zoom, with bidders also on camera holding up their number and bidding as they saw fit. Some featured just the auctioneer, with buyers making bids over the phone or via an on-screen keypad. With less ability to assess the other bidders, it wasn’t the most satisfying way to buy such an expensive asset.
Online inspections on the other hand suited many buyers who could do a virtual tour from the comfort of their home office. In the face of FOMO and travel bans, there was plenty of buying sight unseen. Our view is that this will wind back somewhat (or go hybrid) as Covid eases off, vaccinations increase, borders open, and more listings come on the market.
Verdict: Temporary
Doing your homework on a property before you buy went totally online during Covid-19, and it’s not going back. New and highly sophisticated tools like Residz.com are amazing users by collating all sorts of relevant data (like crime trends, bushfire risk, an investability index, internet speeds, school catchment areas) on every single home in Australia - then sharing it for free. It’s a powerful way to research houses you’re eyeing up, or your present abode. Either way, it’s pretty addictive stuff.
Verdict: Permanent
When the pandemic arrived, global real estate changed forever. The new flexibility in where and how we work led to an interstate stampede by tree-changers and sea changers seeking cafe lifestyles and comfortable home offices. While a few changes won’t last (like online auctions), the majority will. We don’t want daily commutes or squeezy apartments. We do want villages with solid friends and family connections. Perhaps the daily reminders that we are mortal and vulnerable have made us all realise that life is precious, and should be enjoyed to the full.
Image: This is Luxury Travel - Cairns seachange apartment