Sales rise as property activity rebounds in locked-down markets

More properties are being sold as activity rebounds in Australia’s two biggest markets of Sydney and Melbourne with an end to COVID lockdowns in sight, amid record buyer demand nationally. 

The latest PropTrack Housing Market Indicators Report showed market activity picked up in September, with measures of buyer interest reaching new highs despite the long lockdowns in Sydney, Melbourne and the ACT.

The turnarounds in activity in locked-down states drove an increase in national sales volumes last week, realestate.com.au senior economist Eleanor Creagh said.

“Overall, we have a clear picture that coming out of lockdown with freedom in sight, activity is turning a corner and is beginning to pick up,” Ms Creagh said.

Wednesday’s report showed demand based on views per listing of properties for sale on realestate.com.au hit a new high in September, while email enquiries to agents and developers also reached record levels.

“We’ve been seeing buyer demand rise over recent months and what we’re starting to see now is this interest translate into sales,” Ms Creagh said.

“It’s particularly promising for Australia’s largest markets, Sydney and Melbourne, where we are seeing big jumps in market activity as freedom for both cities is now well in sight.

“The momentum should continue in October as restrictions ease further and mortgage rates remain low.”

Property prices have surged during the pandemic as record-low interest rates drive huge buyer demand, although Ms Creagh said the hot pace of growth is expected to slow.

“The runaway price growth we’ve seen is likely to ease, given the benefit of lower mortgage rates appears to have already been baked into prices,” she said.

“We’re also facing new macroprudential headwinds. While these changes will only marginally impact borrowing capacity for now, the Australian Prudential Regulation Authority has left the door open to potential further tightening.”

APRA last week told banks to lift the minimum interest rate buffer they use when assessing whether borrowers could still meet their repayments if rates rise, which will reduce the typical borrower’s maximum borrowing capacity by about 5%.

Housing prices have risen rapidly this year, with buyer demand still exceeding the supply of properties for sale. Picture: Getty

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Ms Creagh noted there was an ongoing imbalance between buyer demand and the supply of properties for sale.

While the spring selling season is underway outside locked-down states, it has been delayed in NSW and Victoria, as well as the ACT.

“We’re seeing that those states are now turning a corner and that is contributing to the uptick in weekly sales that we are seeing nationally,” Ms Creagh said.

National property prices increased by 21.5% over the 12 months to September, according to realestate.com.au data.

Activity picks up in locked-down states

The report showed sales volumes rose 12.1% last week to their highest level in 13 weeks. Preliminary weekly sales were 32.1% higher than the same week last year despite more states being in lockdown in 2021.

“This turnaround in sales volumes at a national level is being driven by an uptick in weekly sales in the ACT, Victoria and NSW,” Ms Creagh said.

Sales volumes climbed 60% last week in Victoria and 68% in the ACT, after COVID restrictions were eased last month to allow one-on-one property inspections during the Melbourne and Canberra lockdowns. Sales volumes were up by 4% in NSW last week.

“As lockdowns ease it’s reasonable to expect a continued lift in sales in those areas over the coming weeks,” Ms Creagh said.

Ms Creagh said the inability to conduct in-person inspections had reduced market activity in Melbourne in particular, with buyers and sellers now taking advantage of the eased restrictions.

“There have been sellers who would have held off listing, particularly in Victoria as one-on-one inspections weren’t able to happen,” Ms Creagh said.

“The easing of restrictions has been welcomed by sellers and they are more confident to list, and buyers are ready to take advantage of that.”

The return of private property inspections has boosted market activity in Melbourne. Picture: realestate.com.au/buy

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Ms Creagh said there had been a significant increase in the number of scheduled auctions in Melbourne.

“It’s a clear sign that confidence is returning because most of those auctions are still online only.

“That is indicative of the fact that there has been pent-up supply and people waiting for restrictions to ease and for this tail end of COVID to come within reach before listing.”

Ms Creagh said the roadmaps to reopening after lockdown, once certain vaccination thresholds were reached, were boosting confidence among sellers and buyers.

“We’re clearly reaching that point now where vaccination thresholds are not only giving us a roadmap out of lockdown but they’re giving us a roadmap towards a future where lockdowns as a strategy for managing COVID-19 are going to be ditched entirely,” she said.

“That factor is also playing into the increased confidence that we’re seeing from both buyers and sellers.”

Under the Victorian roadmap, Melbourne’s lockdown will be lifted once 70% of adults are fully vaccinated against COVID, expected by 26 October.

Sydney emerged from its long lockdown on Monday, when the first stage of restrictions were eased across the state for the fully vaccinated.

Property market activity is picking up in cities affected by COVID lockdowns. Picture: realestate.com.au/buy

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Ray White NSW chief auctioneer Alex Pattaro described the market as incredibly strong, adding there were plenty of opportunities for buyers and sellers in NSW and the ACT. 

“We continue to see incredible confidence within the market with an abundance of buyers all looking to secure a home before the end of the year,” Mr Pattaro said after strong auction results on the weekend.

“The October outlook is strong and we expect it to continue throughout the remainder of the year.” 

The ACT will come out of lockdown on Friday.

Buyer demand at record levels

Ms Creagh said the ongoing shortage of properties available for sale coupled with elevated search volumes on realestate.com.au resulted in record high interest from buyers in September.

“Demand has remained elevated despite lockdowns across the country,” Ms Creagh said.

“Although supply is beginning to normalise, we’re still seeing that supply is constrained.

“The historic high in views per listing is indicative of the shortage of supply and high levels of demand that we have been seeing in the market.”

Demand based on views per listing of properties for sale increased by a further 9.3% nationally in September, hitting a new high.

Views per listing also reached record levels in NSW, Queensland, South Australia and the ACT.

The report showed views per listing rose during September everywhere except for Western Australia and the Northern Territory, where they eased marginally.

NSW and Victoria recorded particularly large monthly increases, up 16.8% and 9.0%, respectively.

Buyer demand is at record levels, amid an ongoing shortage of properties for sale. Picture: realestate.com.au/buy

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Search volumes on realestate.com.au also remain elevated, with property seekers actively looking online.

Buyer search volumes rose to an all-time high in NSW and Victoria during September, as Sydney and Melbourne’s long lockdowns continued.

According to the report, national search volumes in September were just 5% below the record reached in February, and were 18.1% higher than in September 2020.

The lockdowns also drove email enquiries to agents on realestate.com.au to record levels, rising 14.6% during September.

“With many in locked-down states unable to attend open homes, property seekers have been more active online,” Ms Creagh said.

Enquiries to developers about new homes also climbed 14.6% in September to a new high.