The coronavirus crisis is making ripples in the property market, but surprisingly, the off-the-plan sector, so far, appears to be weathering the storm.  March data from reveals a 6.8 per cent increase in searches for new homes compared to the same period last year, which chief economist, Nerida Conisbee, says is “surprising”.

COVID-19: What will happen to property prices in Australia?

“When this all started, I expected everything to go into freefall, but it seems to be far more robust than I expected,” she says.

Conisbee adds, the effects of the pandemic are complicated and there will be winners and losers.

“There seems to be a lot of blanket statements out there about what’s happening in the property market and how it’s all bad,” she says. “But the reality is, we’re seeing a lot of difference across Australia in terms of how property is being viewed. Some markets seem to be far worse impacted than others.”

Confidence rebounding

Search results for off-the-plan homes dipped through the latter half of March after social distancing restrictions kicked in, but even accounting for the drop in activity, the results are a positive indicator of the sector’s resilience.

Conisbee says the rebound in weekly search activity is in line with broader consumer sentiment data.

Man building

Searches for new homes are up year-on-year. Picture Getty

“ANZ released their consumer sentiment and that picked up as well last week,” she says.

“What I think is happening is people are obviously not feeling great, overall, about things. But there was a lot of stimulus announced last week. That third level announced by the government last week seems to have made people feel more confident.”

Buyers still active in Sydney

Metrics used to measure buyer engagement, interest and interaction with new home projects at have also shown strength in many markets across the country, especially in Sydney.

Sydney house and land was showing a lot strength before the pandemic kicked in, but through March leads per listing in Sydney were up 35% for apartments and 66% per land estates, which Conisbee describes as “incredible.”

Sydney data for new homes in Sydney has been robust. Picture: Getty

Director of sales and marketing at Thirdi Group, Luke Berry, says despite the challenges in the current market, his group is still planning to launch new projects, lodge Development Approvals and make sales in Sydney.

“If I was to compare this quarter to the same last year, we’re doing better, which is amazing with the corona cloud,” says Berry. “I think if you have good projects in good areas, they are always going to be supported.”

Gentry Alexandria

Gentry Alexandria recorded a $2.2 million sale last weekend. Picture:

Last weekend, a $2.2 million sale was made at Thirdi’s Gentry Alexandria project at 29-41 William Street in Alexandria. Berry says the project, which only has five apartments left, has conducted an average of 11 private tours over the past month with a similar number lined up for the next fortnight.

Berry adds, the property’s target market is owner-occupiers who are making long-term lifestyle-driven purchasers. He suggests this demographic is a bit more insulated to the financial impact of the crisis than other buying groups, such as investors.

“We’re in this weird little bubble where things aren’t too bad,” he says. “I’m definitely having to do deals, but I’m not compromising the value of the project. I think that’s a combination of timing, good luck and the right product,” he says.

Online engagement a key

The use of digital tools has been a key factor in off-the-plan projects continuing to appeal to buyers, according to Berry.

“We’ve had to innovate and really use our social media platforms,” he says. “We’re working really hard on video content and engaging with buyers through our site.”

Conisbee believes the sector’s embrace of digital tools, such as virtual inspections, are a factor in its relative strength compared to the established property market.

“Where developers have an edge is, when you’re selling a new home you’re selling something that doesn’t exist with great graphics, videos or 3D,” she says. “It’s very different to an existing home where people would typically come and walk around the property.”