Omicron impact on real estate market having different effect

The Delta strain outbreak of Covid and subsequent lockdowns in many Australian cities last year helped fuel a surge in house prices, but the current Omicron outbreak is having a vastly different impact on the housing market.

While record daily case numbers and supply chain issues have wreaked havoc for businesses in retail and hospitality, the property market has remained largely unaffected, despite thousands being forced to isolate.

Realestate.com.au executive manager economic research

Cameron Kusher said it would be business as usual for the Australian property market.

“It won’t make too much of a difference, it will just be as we’ve seen, prices still rising,” Mr Kusher said.

When the nation’s two largest economies endured extended lockdowns in 2021, cautious home sellers kept their plans on hold, resulting in an influx in property listings once life returned to relative normality.

As Omicron picked up steam and started smashing daily case number records, a large portion of the population either decided to stay at home or isolate after contracting Covid – a factor that has left countless hospitality and retail businesses in a vulnerable position.

Mr Kusher said while the outbreak was “a blip on the road to recovery” from a business perspective, it could conversely lead to greater real estate activity.

“Maybe it does lead to a bit of a reacceleration of people starting to think, ‘I can’t spend on all these other things, I might start spending on property again’,” he said.

“I don’t think the Omicron wave should have too much of an impact on the housing market and change the direction of it too much. It will be fairly much as we were, prices still rising but the rate of growth slowing a bit from where it was at the peak of last year.”

Mortgage Choice CEO Susan Mitchell said if last year’s lockdowns were anything to go by, a renewed push towards buying property could prove possible in 2022.

“It certainly seems to be having an effect on people saving money,” Ms Mitchell said of the pandemic.

She said during periods of lockdown in 2021, a high number of mortgage holders either saved extra money in their offset accounts or got well ahead in loan repayments since they couldn’t spend on holidays or other lifestyle events.

“People were 40 to 45 months ahead in their mortgages,” she said. “If they have that ability to save, maybe they have the ability to get a deposit together quicker.”

A recent Canstar survey found that the top three financial new year’s resolutions for 2022 were to save more money, buy a home to live in and buy an investment property.

Ms Mitchell said in terms of the overall impact on property, much would depend on supply.