While the real estate market is suffering the effects of COVID-19, one demographic is propping up Canberra real estate stock levels – separating or divorcing couples. These couples can’t wait to ride out the COVID-19 storm so need to hang up the ‘For Sale’ sign and move on with their lives in new homes.
McIntyre Property Principal Colin McIntyre says 15 to 20 per cent of vendors currently listing their properties for sale slot into the newly single demographic.
“Coming out of isolation, the divorce market is increasing relative to other vendors,” Colin says.
CoreLogic figures indicate about 297,000 homes are sold across Australia each year and the Australian Bureau of Statistics (ABS) says there are around 49,500 divorces per year, often with house sales attached to the settlements.
Generally, former partners sell the family home and buy separate, smaller, affordable properties that reflect the split of the sale proceeds.
Col says single mothers and ‘grey divorcees’ classically look for two or three-bedroom townhouses or units that are close to schools, shops and medical facilities.
“Women generally bear the brunt of child-rearing post-divorce,” says Col.
“They want something affordable, where they feel secure and financially stable.
“Empty-nesters who’ve got to the life stage where the kids are off their hands, feel they’ve done the job, stayed together for the children and now it’s time to live life in a low-maintenance home.”
Col says that a property like 10/27 Elm Way, Jerrabomberra ticks those boxes for people who are making some significant changes in their lives.
North-facing and backing on to parkland with paths to all amenities, the townhouse has sizeable living areas and bedrooms with natural sunlight, making it a comfortable choice for lifestyle transitions.
For divorcing sellers considering listing their properties post-isolation, the good news is that Canberra’s real estate market is expected to hold up compared with other capital cities.
Commonwealth Bank and SQM research economists are predicting price falls of 10 to 30 per cent in Sydney and Melbourne over the next 12 months.
But the ACT, as at March 2020, was performing well, with a 4.4 per cent house price increase from the previous year to a median of $779,050.
Units didn’t fare as well, with a 4.3 per cent decrease year-on-year to a median price of $441,055.
But that’s perfect news for separating couples looking to maximise their financial position by selling high and downsizing to lower-priced villas.
The general feeling is that the June 2020 quarter figures will not be so rosy but that the ACT will be shielded from price drops because of its large public sector workforce and fewer job losses than the rest of the country.
Although Chief Minister Andrew Barr expects the unemployment rate to double to 6 per cent, high-profile economists including Deloitte’s Chris Richardson and Saul Eslake say the economy should be protected.
To date, forced sales and therefore bargain prices, have been minimised because Canberra real estate buyers have secure jobs or have pre-COVID-19 wages supported through JobKeeper, JobSeeker and the ACT’s $20 million program to recruit casuals.
Col says he confident Canberra home sales will stay stable.
“We’re probably not going to see a lot of growth for the rest of 2020 but people still need to buy and sell real estate because their lives keep going,” he said.
“They have babies and need to move, the kids become teenagers and they need to upsize, the kids leave home and they need to downsize, a partner dies … or they divorce.”