Lifestyle property market defying COVID-19 crisis

Lifestyle property market defying COVID-19 crisis

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Country properties with acreage have increased in demand in the past few months, with "COVID-19 refugees" or city buyers vying for a tree change. Photo: Elders.

Country properties with acreage have increased in demand in the past few months, with "COVID-19 refugees" or city buyers vying for a tree change. Photo: Elders.

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"COVID-19 refugees" have been vying for a tree change.

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WHEN the COVID-19 pandemic hit in March, agents were concerned about the WA lifestyle/hobby farm property market.

Most regions had just started to see signs that the market was recovering, after six to eight years of it being very subdued, so the impact of the pandemic had many agents worried and frustrated.

However much to the surprise of most of the industry, the lifestyle market in all of the popular regions has gained momentum in the past three to four months.

Agents across all the hot spot regions of Albany/Great Southern, the South West, Greater Perth and the Gingin/north of Perth areas all reported varying degrees of the market improving since COVID-19 made its way to Australia.

And throughout all these regions, Perth buyers are a common buyer demographic, suggesting that COVID-19 has prompted them to seek more space and escape the crowded and high traffic city life.

They have been termed "COVID-19 refugees" by Elders real estate sales specialist Blair Scott.

Vacant land has been in high demand across the regions, likely brought on by the State and Federal government, which were announced in June.

Albany/Great Southern:

Mr Scott said the lifestyle market had been busy in the past few months and in recent weeks stock levels have dropped considerably.

"Demand for lifestyle properties has increased a lot and I think the low stock levels that we are currently experiencing are due to the government (building) incentives," Mr Scott said.

Rob Mason, of Mason Realty said when intrastate travel was restricted, the market slowed as the ability to show properties was "very much hampered, but we noticed a significant uptick in online activity for our listings".

"Once restrictions were eased, this turned into enquiry, then we were very busy with viewings and gradually sales," Mr Mason said.

"I really think COVID has made people reconsider their lifestyles, their community and what is most important to them."

While demand has certainly increased, both agents said that property values have generally remained steady compared to pre-COVID-19 prices.

Vacant blocks of land in popular areas, such as Middleton Beach, Mira Mar and Mt Clarence have seen an increase in competition and subsequently prices, which Mr Scott attributed to the government building grants.

"We have quite a few properties with multiple offers and people are paying above the asking price," he said.

The buyer profile has largely been locals and city people/families looking for a permanent or holiday property, as well as retirees/semi-retirees mostly from Perth, some from the South West and a little from the Eastern States.

Lifestyle properties in the Great Southern vary from less than one hectare to 80ha.

Mr Mason said that most enquiry is in the 2ha to 20ha range.

He anticipates the current demand to continue into the future.

"The spike in enquiry for quality lifestyle properties in the Great Southern indicates to me that this market will continue to see improved demand over the near to medium term," he said.

"Let's not forget that these properties have seen significant price falls over recent years and that they have represented excellent value for some time - now more people are waking up to this fact."

South West:

The lifestyle market is the South West's property sector that has seen the biggest increase in interest since the pandemic started, according to Steve Lloyd-Smith, Nutrien Real Estate Bunbury.

"The increase in buyer enquiry suggests people are feeling more confident about spending their money again, as pre-COVID-19 they were not prepared to spend money," Mr Lloyd-Smith said.

"We have a listing at Waroona that has had the highest level of activity out of all our properties since the pandemic."

After the South West lifestyle market has been depressed for about six years, Mr Lloyd-Smith said this improvement in the market could be a positive to come out of the pandemic.

However despite the rise in buyer demand, he did report that vendors have become more cautious and hesitant to sell because of uncertainty.

Elders' Don Fry said the strongest segment of the market has been for smaller lifestyle properties (less than 8ha) to residential listings.

"Enquiry has also picked up in the 8ha to 40ha segment," Mr Fry said.

The South West has appealed to WA country residents from regions such as the Wheatbelt and Great Southern.

But again the most dominant buyer demographic has been locals and Perth buyers, particularly young families and buyers aged 35 to 55 years old.

In the South West Mr Lloyd-Smith said the size of lifestyle properties varied widely depending on the area, such as in Ferguson Valley they average 2ha to 8ha, whereas in Waroona they are much larger at about 40ha.

Greater Perth:

Nutrien Harcourts real estate specialist Rob French who services the Greater Perth area concurred with other agents and said buyer enquiry had picked up since restrictions were lifted.

"There is certainly some revived activity in the marketplace, which is really positive," Mr French said.

"Property values have been a bit stronger than I expected from when the pandemic first hit."

While there is some renewed interest from buyers, Mr French said buyers' price expectations tended to be below market value.

"I still think there is some uncertainty in the market, due to COVID-19, so it is very difficult to speculate where the market will go in the next few months to a year," he said.

"The government building grants appear to have stimulated some enthusiasm for vacant land, but I expect it will prompt builders to increase their prices and it will filter into the property market."

Gingin/north of Perth:

Country Values Real Estate's Tom Cabassi echoed the sentiment of agents in other hot spot lifestyle regions, saying he has been very busy in recent months and weeks.

Rather than COVID-19 prompting buyers to look to regional areas for the benefit of their health and lifestyle, Mr Cabassi believed the increase in demand for vacant land was largely due to the government building grants as he has been particularly busy since the stimulus packages were announced.

"We weren't expecting the market to trigger for a while, so it has come as a bit of a surprise," Mr Cabassi said.

"The market around Gingin was already doing pretty well pre-COVID-19 but we have been much busier since Easter."

Mr Cabassi expected the high demand for vacant land will outstrip the supply and "I think we will run out of listings".

Similar to other regions, younger buyers have been a dominant buyer group.

Mr Cabassi said with the Tonkin Highway extension, travel to Perth has been reduced by about 20 minutes, which mad the country areas north of Perth even more appealing.

With this increased activity, coupled with the industrial precinct and Muchea Livestock Centre being close by to generate jobs, he expects the Gingin region to become a semi-rural lifestyle hub similar to Mundaring and the Perth Hills.

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