Buyers continue to ink off-the-plan contracts despite current climate

Off-the-plan buyers are still inking deals on new apartments despite the uncertainty thrown over the market by the coronavirus pandemic.

Agents say buyers haven’t been driven away from the property market with some even spurred on by a feeling of urgency and a sense of reduced competition. 

“There’s a sentiment, certainly in the eastern suburbs, that now is a great time to buy because there’s less competition,” said Melbourne agent Leonard Teplin, of Marshall White. 

“We’re finding the smart money is picking up the phone and saying, ‘Look, we think there’s a window of opportunity now’.”

In the past seven days, Mr Teplin said his agency had sold 10 off-the-plan units, including a $2.18 million apartment. 

Strong buying was also recorded at inner-city developments with Lechte Corporation director Chris Paul reporting the company had received deposits for two apartments totalling more than $2 million in the past week.

“The thing about the property market is it’s fear and greed and we’re really seeing fear that people will miss out on the property that’s available,” he said.

CBRE’s Melbourne managing director, Andrew Leoncelli, said display suites were being cleaned three times a week, up from twice, and inspections were only being taken by appointment. 

He said CBRE finalised 21 new deals last week, including a $2 million sale for a Kew development and $1.6 million sale at Malvern East project. 

“Despite what’s going on, people are still committing to contracts and buying,” he said. “Our actual activity is up by inquiry and online leads. I think people being at home has helped that.”

Buyers were choosing to buy property rather than stay invested in shares, and felt particularly reassured by the long lead times with off-the-plan purchases, said Carlo Palamara, of developer Sekisui House in Sydney.

“With off-the-plan you only have to put down a 10 per cent deposit, so you don’t have to settle or borrow from the bank for 18 months or whenever the project’s ready, and in 18 months let’s hope we’re over this,” he said.

“People know that property is still more secure. Even if I go back to the GFC, we had a very similar scenario in that we saw the stock market copping a pounding severely and the property market just took off.”

Thursday’s interest rate cut may also open the door to overseas buyers, said Sherwood Luo, managing director of Greenland Australia, the developer overseeing the Park Sydney urban renewal project.

“Following today’s record-breaking interest rate cut to a new low of 0.25 per cent, we’re also expecting to see more buyers become active, with the low cash exchange rate from AUD to USD and RMB (Chinese yuan) also playing a role in the decision-making of overseas buyers,” he said.

“As such, despite the emergence of COVID-19, the current market conditions are historically beneficial for investment in Australian property.”

Downsizers, a key demographic in the apartment market, don’t appear to be dissuaded from buying in the current conditions, said Andrew Malouf, director of Brisbane developer Spyre Group.

“It depends on the market you’re in, we target downsizers and owner occupiers and what’s happening on the sharemarket and with the coronavirus, economically isn’t really affecting their decision making and what they want to do,” he said. 

Mr Malouf, who sold a $2.6 million apartment at the Natura development at Burleigh Heads on Saturday, said agents were adapting to requests for social distancing. 

“We’re finding there’s a lot more requests for property to be viewed digitally and online so a lot of our agents are taking video footage of the sales display and sending it to clients,” he said.