The novel coronavirus has shaken the world with its far-reaching impact on the global economy. While the health sector is bracing itself to keep pace with the rising number of cases in Australia, the economy has started showing the signs of a struggle. Several small businesses have closed down due to the lockdown imposed on specific states, and a significant portion of the workforce has become unemployed.
It is an alarming situation as no sector has managed to remain untouched from the impact of the COVID-19 pandemic. From commercial real estate to the luxury property for sale in Australia, every sector has been affected by the changing economic conditions. Although the prices of residential properties are going down, the prime property sector seems to be better placed in the current scenario.
With online auctions experiencing more participation after the easing of the restrictions, things are looking up. It remains to be seen how much the sector will change until the vaccine arrives. Meanwhile, let us try to understand how the pandemic will reshape the needs of the prime property buyers.
Buyers Will Snap Up Premium Properties
The housing sector in Australia has witnessed a massive slide in the second quarter of 2020. Prices of residential properties have fallen across all the capital cities, including the world-famous locations of Sydney and Melbourne. The overall price dip has been calculated at 4.4% over the June quarter. It is being predicted that the prices will fall by another 2.3% during the September quarter.
However, the premium A-grade segment has remained unscathed. In fact, the super-rich population ended up spending more on buying trophy homes in Sydney to stay safe from crowded areas. Many investors consider Australia to be better suited to deal with the ongoing challenge.
Consequently, buyers have spent $214.5 million on 15 luxury properties in Sydney in the first half of 2020. The opulent homes of Perth have also recorded an increase of 2.3% in values from May to July even though the global prime residential property sector is undergoing a low phase.
Perth And Gold Coast Will Be The Most Sought-After Destinations
While Sydney has maintained its winning streak when it comes to high-end homes, Perth and Gold Coast have also managed to raise the bar. The prices of premium homes in Gold Coast rose by 3.4%, whereas the values of Sydney’s prime real estate increased by 3%. The demand has been growing, and the supply has been low, which has allowed the prices to rise. The current sentiment among the young and affluent buyers is to grab properties that are spacious and independent.
They are looking for privacy and social distance in the COVID-19 affected world. Consequently, the demand for large apartments has been soaring. Gold Coast has also become more popular as international travel has been curbed and the wealthy population is now looking at homes that are located in tourist destinations.
Uninterrupted Financing Will Boost The Confidence of Buyers
The confidence of the ultra-rich buyers has not shattered even in the COVID-19 period as financing has not been affected. Although the demand from global buyers has gone down, the local investors are keeping the markets pumped up with million-dollar transactions. In fact, the entire region of Australasia has been performing exceptionally well in the prime property segment.
The lower listings and soaring demand have helped in keeping the market abuzz with activity. Brisbane has also witnessed an improvement of 2.5% in the prices of its trophy homes. The record low-interest rates due to the pandemic have further helped the buyers to make huge investments that will get them exceptional returns in future.
The limited supply and the support offered by the government to pull back the housing sector from a downturn is proving beneficial for the luxury segment.
Prime Properties Will Be Considered A Safe Choice
Most property experts suggest that the current trend of buying luxury property will continue among the high net-worth individuals as it is a high yielding investment. It is being viewed as more stable than investing in stocks and shares at the moment when the economy is dwindling. Prestige homes are considered long-term investments that remain valuable in every circumstance.
Thus wealthy individuals will be investing in various capital cities to buy luxury homes in the coming months. Brisbane and Perth will be favoured by the rich and the famous community, which are looking for a high standard of living in beautiful locations.
As the economy is reopening, the demand for prime residential property is rising among expats, locals and people moving from other states. Also, buyers are feeling more confident as lending has become easier, and there are no international buyers taking away the cream from the top.
The Changes Brought About By COVID-19
Most buyers are now looking for spacious and bigger homes as they will prefer to work from home. Thus they will need mansions that can accommodate home offices and have ample entertainment zones for the children. They are also looking at residential areas with ample outdoor space and proximity to markets to get a supply of essentials quickly and easily.
Some of them will also be moving to the countryside to stay safe from problems like a pandemic. They are not worried about the prices and are willing to pay the asking price without bringing down the price as financing has become easier.
Also, the prime property will witness a jump in prices post the COVID-19 pandemic as more rich people will be looking at safe investments to protect their earnings. While the offshore investors will be staying away, the limited supply will ensure a peak in demand in the coming months across the country. Thus the sector will not be affected by the crisis and will emerge better positioned than other sectors after the situation stabilises.
Million-dollar transactions related to luxury property for sale in Australia have not ceased in the ongoing fight against COVID-19. The prime real estate segment is well insulated from the crash in prices experienced by the housing sector. Therefore investing in prestige property is the best way to secure your funds in the current economic conditions.