Prime Minister Scott Morrison announced on Tuesday night a restriction on in-room auctions and open house inspections.
The new restrictions also included the closures of beauty parlours, RSL's and social sport activities, among many others, as well as a restriction on how many people could attend weddings and funerals.
Mr Morrison said the measures were aimed at restricting the amount of close contact between groups of people and minimising the spread of the virus.
"But the point and the principle is very clear - large gatherings brought together by particular organised events are things that we are seeking to avoid and that's the principle the states and territories will be seeking to follow," he said.
With both auctions and open houses being an integral part of how the Australian property market operates, how will the industry cope?
Product Features Advertised Rate Minimum Deposit Product Features
6 Month Term Deposit
Even with the escalating health crisis and economic fallout from COVID-19, last week was the second busiest for auction activity so far this year, with 2,539 homes taken to auction across the combined capital cities.
Much of what turned the property market around in the latter half of 2019 was high auction clearance rates, driven by strong results in Sydney and Melbourne.
This continued into 2020, with CoreLogic reporting that both Sydney and Melbourne moved back into double-digit annual growth rates, with values up 10.9% and 10.7% respectively over the twelve months ending February.
Nationally, dwelling values were up 6.1% over the same period.
Propertyology Head of Reseach Simon Pressley said he expected real estate transactions to drop significantly but values to hold firm.
“Social distancing, combined with significant change and disruption to everyone’s routine will result in an all-time record low volume of real estate transactions in quarter 2 and 3 of 2020," Mr Pressley said.
"That will be sharply followed by a quick and strong surge as soon as everyone comes out of their cocoons in the back half of this year.
“Propertyology anticipates that real estate values will hold firm during this period of mass isolation.
"Australia entered Covid-19 with record low volumes of properties for sale, low rental supply, and record low interest rates.
"These will shield asset owners from value declines.”
Real Estate Institute of Queensland (REIQ) CEO Antonia Mercorella said the measures would no doubt impact the property market, but could quickly be adapted too.
“The Prime Minister’s announcement is not a total ban on real estate transactions from taking place as that would have a devastating impact on the Australian economy,” Ms Mercorella said.
“While in-room auctions cannot be conducted for the foreseeable future, online and telephone auctions will inevitably become the new normal.
“With restrictions on open home inspections which traditionally attract large groups of people also prohibited, private inspections by appointment remain a workable option coupled with hygiene safeguards as recommended by Queensland Health which ensures real estate transactions can and will continue.”
Mr Pressley echoed Ms Mercorella's sentiments and said real estate is more than prepared to survive without auctions and open homes.
“The technology and processes are already available," he said.
"It’s not a case of reinventing a wheel. It’s more like putting the key in to a different slot.”
How will the rental market cope?
Mr Pressley said large parts of Australia entered this pandemic with low vacancy rates and rising rents but landlords and tenants alike would be negatively affected by the crisis.
“Communities need to remember that there’s just as much potential for the personal income of a landlord to be unsettled by the repercussions of this virus as there is a tenant," Mr Pressley said.
"Covid-19 does not discriminate. Over recent years, landlords have already been dealt a series of blows.
"If they aren’t afforded the sensitivity that they deserve now, there’s a real risk of landlords getting out of the market which will cause a reduction in rental supply and higher rents in coming years.”
Ms Mercorella stressed these measures were temporary and the $6.8 trillion Australian property market was fundamental to the country's financial wellbeing.
“Australia’s property market will inevitably be impacted by these measures however they are only interim and will still allow the real estate market to continue transacting.
"It’s important to remember that a stable property market is fundamental to the welfare of Australians, to the financial system and to the broader economy.”
- Fresh calls for universal pension after talk of new 'death tax'
- How does a personal loan impact your credit score?
- What fees do personal loans charge?
- What is peer to peer lending?
- Secured vs unsecured personal loans: Which is right for you?