How coronavirus has made home buying in the US, Europe, Australia and other places even harder
Owners in California, France, Spain and other usually hot property areas are pulling homes from the market as the global pandemic continues
Home sales have collapsed in many international markets because of the coronavirus, and it appears many vendors are deserting the market, too.
When the National Association of Realtors (NAR) in America surveyed its members in April, it found that 56 per cent of owners had pulled their homes from the market, citing coronavirus as the reason.
This is despite the fact that NAR's report suggests buyers are still willing to commit: a quarter of property agents with clients putting contracts on homes had at least one do so without physically seeing the property.
For those clients, the median number of homes toured – either virtually or in person – before putting a contract on a home was just three, compared to typically nine homes in 2019.
Pulling back is more likely to occur among vendors who were thinking of selling, but had decided not to, according to the California Association of Realtors. Their data suggests this is occurring in 45 per cent of cases.
In Melbourne, Australia, upmarket buyer's agent David Morrell says the coronavirus “has smashed the top end”.
“Vendors are retreating, absolutely,” he says. “Any person selling at the moment has to be doing it for the 'three d's' – divorce, death or downsizing – or now there could be a fourth one, debt.”
Even people thinking of selling are asking, “Why would I do it now?”, when there are no inspections allowed, says Morrell. “To be frank, I would advise them to have a Panadol and a good lie down for a month or two, and don't sell unless you have to.” He is talking about the very top end of the market, in luxury, blue-chip locations such as Toorak and South Yarra. For properties below A$3 million (US$653,270), the market is “still intense”.
Above that price threshold, buyer demand is as strong as ever. “We can't get enough houses,” Morrell laments. “Our clients are looking at buying land as gold bricks, or they're starting to buy generational. They'll say, get me three terraces in South Yarra for my kids – but where could you find three terraces?”