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On the weekend the greater Sydney lockdown was announced, MoneyQuest Wollongong broker Paul Wright saw a record number of property purchases resulting in a boom of finance activity. Over the following fortnight, the number of new leads dropped as home buyers put their plans on ice due to the uncertainty of the lockdown.
But as soon as school started up again there was a resurgence in enquiries as construction workers stayed at home due to stricter restrictions and parents struggled to balance work with home schooling commitments.
The Wollongong property market had been booming up to the start of the current lockdown, with properties selling like hotcakes as city dwellers flocked to the regional area about an hour south of Sydney.
With many property owners choosing not to list until the end of lockdown and buyers holding back from purchasing in the meantime, increased demand looks likely to put more pressure on property prices coming out of restrictions, said Wright.
On the other hand, there could also be an influx of new listings to balance this, he said.
But while the property market is likely to remain strong coming out of lockdown, the halt on construction in the Illawarra over the past two weeks has brought a blow to the local economy, with the flow on effects adding to a difficult school holiday period.
Tourism and hospitality-based businesses often rely on an influx of holiday makers from Sydney during the school holidays, however, the current lockdown has meant such businesses have suffered. Closed construction sites have added to this challenge, with café owners in Wollongong’s CBD facing little to no business as a result.
“The businesses that are going to be impacted the most are your local small businesses in hospitality,” said Wright. “Fifteen per cent (15%) of a lot of areas’ employment is construction based, so the flow on effect is going to be quite significant.”
In terms of his client base, Wright said the majority haven’t been impacted by the current lockdown compared to the one at start of the pandemic, in which he took 60 phone calls from worried clients over two days.
The only phone call he has had this time around was from a skydiving instructor who worked in the hospitality industry. The client had a pre-approval in place but wasn’t sure if this would hold up when it came to the time of purchase due to the loss of business from the lockdown.
“Being self-employed, the bank’s going to rely on their historical data,” he said, explaining there was a risk the lender could ask for further evidence of income via a BAS or transaction statement if the client purchased towards the end of the three-month period.
Kate McIntyre is an online writer for Mortgage Professional Australia. She has a wealth of experience as a storyteller and journalist for a range of leading media outlets, particularly in real estate, property investing and finance. She loves uncovering the heart behind every story and aims to inspire others through the artful simplicity of well-written words.
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“We don’t know at this early stage how the banks are going to react if this continues,” he said.