As the Delta variant of COVID-19 forces half of the country's population into lockdown once again, the property market has been forced to adapt, with Property Managers finding new ways to navigate this uncertain terrain. Over the past 18 months, Property Managers have had to weather the storm of the COVID-19 pandemic – dealing with several national, state and city lockdowns, all the while trying to do their jobs remotely from their living rooms.
As the property management industry is not considered an “essential service” by the government, Property Managers across the country have been forced to fulfil their duties from inside their homes. However, before we delve into how Property Managers are adapting to this new normal, let’s take a brief look at just how the COVID lockdowns impacted the property market.
How has lockdown affected the property market?
Despite being in the midst of a global financial crisis, Australian property prices have continued to soar at the fastest rate in 17 years. With the median house price in Australia at a record high, Australian house hunters will need to spend an average of $955,927 if they want to buy a home. Unsurprisingly, Sydney remains the most expensive city to buy a house, with a record median house price of $1.41 million. Melbourne follows, costing an average of $1.02 million for home buyers, and in Canberra buyers can find a house at the national median.
According to a report released by CoreLogic last month, auction results across Sydney and Melbourne have remained resilient in lockdown – particularly in areas with circuit-breaker lockdowns. However, there has been a larger-than-normal number of auctions withdrawn, postponed or sold off-market. Property values have also remained resilient through lockdown, and have seen strong growth in areas where social distancing restrictions began to ease. This stability is likely due to extensive government stimulus and institutional support for the sector – a factor which is far less certain going forward. In the report, CoreLogic Head of Research for Australia, Eliza Owen, said that in the event of an extended lockdown, the future of the housing market relies on financial support from the government. “In the event of another extended lockdown, the future of housing demand and supply becomes much less certain if that same government and institutional support is not there,” said Ms Owen.
So, how has the rental market been affected?
The latest wave of lockdowns to contain the spread of COVID-19 have seen mixed trends across the country for rental demand. While the end of lockdown saw rental demand in South Australia rebound significantly, demand in New South Wales – where restrictions are still in place – has fallen below what it was a year ago. The demand for rentals remains at around 20% below the peak recorded in January this year, but it’s still 25% higher than before the pandemic in 2019. A shift in rental demand has led to Australian renters experiencing their biggest annual rent increases since January 2009. This has mostly been driven by sea changes, as renters are looking to move out of cities and into regional areas in their quest for a better lifestyle – as they no longer need to commute for work every day.
The median rent of houses and units jumped to $476 per week in June, which is 6.6% higher than the same time last year, while rent in regional areas surged by 11% – the biggest spike ever. Currently, the most expensive city for rentals is Canberra, costing renters an average of $620 per week, while Darwin rent prices shot up by 22% in the last year alone. This shift in the rental market has meant that an increasing number of property managers and landlords in areas with less demand are having to let go of their rental properties after struggling for months to find a tenant.
What does this mean for Property Managers?
The first wave of lockdown was challenging as it was unknown territory for the vast majority of property managers. No one knew what lay around the corner, when restrictions would be lifted and what the implications would be. This forced property managers to adapt. With working from home becoming the reality of life in a pandemic, embracing technology became a necessary part of the job. The surge in online viewings meant that Property Managers needed to utilise teleconferencing tools, such as Zoom and Facetime, on their tablet or smartphone. In a time where social distancing measures were in place, virtual viewings proved an adequate solution for Property Managers and one that they can continue this time around. This has also been applied to routine inspections of rental properties, as Property Managers now know that they can simply conduct them via the InspectMe app.
Meanwhile, in instances where government restrictions meant that Property Managers were unable to visit rental properties – they adapted again by directing prospects to online resources, such as virtual tours and online listings. As a way of adapting to the new normal, Property Managers have begun utilising property management software to centralise and streamline financial management. This has allowed for greater flexibility and security in tracking and reconciling payments from tenants. Similarly, Property Managers were forced to take their rental contracts and important paperwork online by utilising tools like DocuSign to get tenant signatures.
The COVID-19 pandemic was (and still is) an unprecedented shock to the housing market. However, in the midst of lockdown Property Managers have discovered new and innovative ways to adapt to this new reality. By embracing technology, communication and streamlining processes, Property Managers are paving the way for the future of property management and we love to see it.
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