There’s hope on the horizon for buyers competing over a shrinking pool of properties, as Sydney’s ‘roadmap to freedom’ boosts seller confidence.
Property listings have slumped in recent months as lockdown restrictions and economic uncertainty prompted vendors to hold off selling their properties.
The latest PropTrack Listings Report recorded a 2.3% fall in the national number of new property listings on realestate.com.au during August, however there were some green shoots in Sydney, where new listings jumped 11.9%.
Report author and realestate.com.au director of economic research Cameron Kusher said Sydney seller confidence was boosted by rising vaccination rates and the NSW government outlining the eased restrictions that would apply once vaccination targets were hit, ahead of the September release of its roadmap out of lockdown. The ability to hold private inspections also proved valuable during August.
“While the national property market slowed in August with a number of states in lockdown, confidence returned for Sydney sellers as a path to reopen was announced by the NSW government,” Mr Kusher said.
“As long as one-on-one inspections can continue in Sydney, and vaccination rates continue to climb, it’s likely we’ll see seller confidence continue to gain momentum as we head into Christmas and the new year.”
The NSW government announced lockdowns will lift for all adults who have received both doses of the COVID-19 vaccine from the Monday after NSW passes the 70% double vaccination target. This is currently expected to occur around 18 October.
In contrast, tougher lockdown restrictions that have prevented buyers from physically inspecting properties caused sellers to put the brakes on their sale campaigns in Canberra and Melbourne, with new listings falling 35.1% and 27.1% respectively.
Until Saturday 18 September, in-person home inspections were banned in the ACT and Melbourne but are now permitted by private appointment.
Snap lockdowns also weighed on new listings in other states and territories, with Brisbane recording a 4.9% fall while Darwin fell 1.5%.
Lockdown-free cities, however, were spoilt for choice, with new listings in Adelaide surging 37.3%. In Hobart, listing volumes hit the highest level since March following a 22.4% monthly increase, while Perth recorded a 7.2% rise.
Market gearing up for delayed spring selling season
While lockdowns have hit seller confidence, buyer demand remains near record levels.
Mr Kusher said the spring selling season will play out differently around the country.
“In those areas not in lockdown we are likely to see typical conditions, at least initially, but in NSW, Victoria and the ACT I would expect a delayed start to the selling season until such time as lockdowns end,” Mr Kusher said.
“I would expect the start of spring to be fairly slow in terms of new supply in those areas locked down.”
However, Mr Kusher said listing volumes should bounce back quickly once lockdowns end as sellers tap into the strong buyer demand.
“Given the experience from Melbourne’s lockdown in 2020, and the ongoing level of high demand, we are confident that once lockdowns are over seller confidence will rapidly return and new listings are likely to rise quickly,” he said.
Sydney couple Ali Peattie and Jack Fahey had been holding off listing their inner-west home until they were able to buy another home first. But with such a scarcity of properties available, they decided to push ahead with a selling campaign.
“I just thought it’s a good time to sell while everyone is locked down. There’s zero stock on the market, it just seemed like a good opportunity because there’s no real supply out there,” Mr Fahey said.
“When you’re trying to buy and not knowing how much you’ve got in your pocket it’s very hard to know how much or what you can buy.”
Mr Fahey said interest in the century-old character home had already been strong, just a day into the tight two-and-a-half week selling campaign.
“My agent said he’s already filled up all the slots for the first weekend of showing,” he said.
The PropTrack report found new listings in Sydney’s inner west region jumped 6.9% in August, although total listings fell 4.5% as buyers continued to snap up properties at breakneck speed.
While seller confidence is returning, Mr Kusher said demand continues to outstrip supply with total listings in Sydney in August the lowest they have been since January.
“Total listings in regional NSW also declined month-on-month to reach a new historic low,” Mr Kusher said.
Regional living continues to appeal
The desire for more space and lifestyle opportunities during the pandemic has pushed buyers away from the capital cities, with listing volumes reaching record lows in regional areas.
New regional migration data from the Regional Australia Institute and Commonwealth Bank released Friday showed a further shift towards regional areas during the June quarter.
The Regional Movers Index recorded an 11% rise in the number of people moving from capital cities to regional areas in the three months to June, compared to a year earlier.
Properties within a three-hour drive from the capital cities are proving to be the sweet spot, particularly in Melbourne where residents have endured the nation’s longest lockdowns.
“The experience of lockdowns is front of mind for Victorians, so the desire to seek a tree change is rapidly growing,” CBA executive general manager for regional and agribusiness banking Grant Cairns said.
The local government areas recording the largest annual growth in movement were all located within three hours of Melbourne, led by Moorabool, Mansfield and Corangamite.
Queensland continued to attract the highest number of city dwellers, with 11% of all people moving out of a capital city settling in the Gold Coast, followed by the Sunshine Coast, Greater Geelong, Wollongong and Newcastle.
Economist at realestate.com.au Anne Flaherty said many regional markets are continuing to outperform their capital city counterparts for price growth.
“Prices in Queensland are benefiting from record levels of interstate migration into the state,” Ms Flaherty said.
“Price growth in regional Victoria have more than doubled that of Greater Melbourne over the past 12 months,” she added.
Nationally, Ms Flaherty said prices climbed in every state and territory over August as buyer demand continued to outpace the supply of new listings. In the 12 months to August, property prices rose 20.8% nationally according to data from realestate.com.au.
Mr Kusher said listing volumes should improve during spring and into summer, however it’ll take a while to fully recover.
“It seems unlikely demand and supply will return to equilibrium in the short term, which is likely to lead to further increases in property prices,” Mr Kusher said.
Affordability crunch pushing out first-home buyers
The average value of a home in Australia rose by more than $50,000 in the space of a three-month period, data from the Australian Bureau of Statistics showed.
In the June quarter, the total value of Australia’s 10.7 million residential dwellings rose by $596.4 billion to $8.9 trillion, the largest quarterly rise on record. It means the average price of a home rose by $52,600 to $835,700.
Ms Flaherty said buyers were having to move quickly to be successful.
“Investors are responsible for a growing proportion of this demand, whereas first-home buyers are continuing to wind back,” she said.
Investor lending has recorded an unbroken period of growth since October last year, and has almost doubled in value compared to a year ago.
In contrast, new loans to first-home buyers fell by almost 8% in both June and July, but still remains 20% higher than a year ago.
Despite the growing affordability issues and extended lockdowns, Westpac’s latest consumer sentiment survey showed confidence in the housing market improved in September, with the ‘time to buy a dwelling’ index recovering all of the previous month’s decline.
Westpac chief economist Bill Evans said affordability is still weighing on people’s minds though, with the index remaining 26.8% below its November peak.
“Affordability is squeezing confidence amongst owner occupiers and first-home buyers whereas confidence with the outlook for prices is supporting the outlook from investors,” Mr Evans said.
“As we go forward into this housing boom I think without doubt we’ll see even more pivoting towards investors and away from owner occupiers and first-home buyers,” he said.
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