Australia’s peak springtime property market is likely to land early this year as COVID-19 restrictions ease across the country.
The spring season has traditionally been the most effective and popular time to sell homes with the weather warming up and gardens in full bloom.
But property analysts and real estate agents say this winter could prove a wonder and a prime time to sell as markets start to pick up amid the winding back of government restrictions and newfound certainty amongst both buyers and sellers.
Buyers are back
Nerida Conisbee, chief economist at realestate.com.au, said the fallout of the COVID-19 pandemic, lockdowns and economic crunch had caused a short supply of stock, but more people were keeping a keen eye on the market and searching realestate.com.au.
“We are seeing a definite recovery in the buyer market so buyers are there and are very active on-site, but most importantly, they are also inquiring,” Ms Conisbee said.
“In terms of seller activity, we are starting to see a flattening out of listings in Sydney, so that is good news. Elsewhere it is still well down compared to the same time last year, but it’s definitely moving in the right direction.”
Ms Conisbee said rental markets were also on the improve after a surge in rental listings with the onset of COVID-19, with people moving in with relatives or to house-sharing arrangements. That increase was now petering.
Sales director at Marshall White – Stonnington, John Bongiorno, said “buyers are certainly coming back”.
“They’re not getting carried away by prices or getting carried away by the market or anything, they’re being sensible about what they’re paying,” he added. “I think prices are remaining static at the moment and that’s the way that I think it’ll be for some time.”
Strong search activity hints at early stages of recovery
Latest data on the volume of searches for properties for sale on realestate.com.au shows search activity hit a new record last week, rising by 0.5%.
Search activity is now up 37.7% year-on-year and is 62.6% higher than the low in March. It has now grown for nine consecutive weeks, but the rate of growth is slowing.
Ms Conisbee said renewed interest was indicative of the early stages of a recovery, but warned some parts of the market would take longer to recover than others.
“If you have a look at a house in a nice area that’s got good amenity, that’s probably going to hold up OK, whereas if you go to high development areas, particularly those located close to universities that may rely on foreign students or rely on investors, they’re the areas that will struggle,” she said.
“We’re seeing this big surge in first home buyer activity, but investor activity just hasn’t returned and is seeing very low volumes of inquiry.”
Early spring rush could be on the horizon
Mr Bongiorno said he’s expecting “a very different winter” this year as demand continues to move upwards.
“We’ve seen demand increase week-on-week since Easter and there have been a number of examples of expressions of interest and even private sales that have exceeded market expectations,” he said. “It’s giving vendors more confidence.
“July is traditionally our quietest month of the year next to January but we believe this July will be quite busy because Victorians who usually go up to Queensland will be around, and we’re actually booking quite a number of auctions in July, we’ve already exceeded our auction numbers for July over the last five years.”
Bronte Manuel, director of residential sales at Toop & Toop agency in Adelaide, predicted a premature spring rush. He said while stocks were low, there was a strong appetite to buy.
Mr Manuel said despite restrictions of 10 people at an open for inspection at a time in South Australia, Toop & Toop attendances had increased by 20% a week.
A strong appetite from buyers could bring on a premature spring rush. Picture: realestate.com.au/buy
“I had an auction in West Croydon on the weekend. Before COVID-19 the price was $614,000. We had a lot of interest and 30 odd bids and sold it for $628,000 so we’ve come out of a good market, gone into COVID and we’ve trumped that price,” he said.
Andrew Chamberlain, managing director of Canberra agency Blackshaw, said the market was moving.
“The market is coming out of its winter hiatus,” Mr Chamberlain said.
“The underlying strength in the market is as strong as I’ve seen it. We finished May with 6.3 registered bidders on average for the month and that’s the highest it’s ever been.
“There’s been a hesitation to list (properties for sale). I’m in no doubt there are people who would have been in the market to buy whose circumstances have changed and they are no longer buyers.
“But it’s more the case where it seems to have affected the actions of sellers and that’s why we have very healthy market conditions.
“I don’t see us having an overcorrection in terms of such a large increase of properties coming onto the market where it overwhelms the current demand, but certainly anyone putting their property on the market is almost guaranteed to be met with a high degree of inquiry.”
Perth agent Jody Fewster, from Ray White Cottesloe Mosman Park, said the market was showing signs of great promise as COVID-19 restrictions eased.
“There is a quiet air of excitement with more buyers at home opens,” Ms Fewster said.
“Although we had a rainy long weekend and half the city went (on holiday) down south for the first time here in Perth last weekend we saw 131 buyers across 13 home opens.
“The lack of housing stock, especially in the western suburbs, has buyers complaining of limited options. Prices are holding for this reason and with interest rates tipped to remain at historic lows when the RBA meets tomorrow there is no better time to buy.”