Homes sales surge as autumn falls on Australian property market

March 11, 2021

Homes sales surge as autumn falls on Australian property market

March 11, 2021
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The Australian property market has continued its flying start to 2021, with the number of properties sold to hungry homebuyers up significantly compared to the same time last year, pointing to a strong autumn selling season. 

Weekly data from realestate.com.au showed 6,556 properties were listed as sold last week, compared to 4,852 in the same week in 2020. Sales volumes were up 32% nationally over the first 10 weeks of 2021, compared to 2020 figures.

Victoria and Queensland both saw a more than 30% increase in the number of properties sold, while New South Wales had a 27% jump. The Northern Territory saw the biggest increase in home sales at 65% but the number of homes sold was far less compared to the more populous states.

Director of economic research at realestate.com.au Cameron Kusher said the positive sales volumes are a reflection of the strong demand for residential property currently.

“Supply levels remain low and demand is unprecedented, which is resulting in properties selling quickly and sales volumes lifting significantly,” Mr Kusher said.

“I believe we’re going to see a strong autumn season. Stock supply remains low and while it may increase, it seems unlikely the uplift will be sufficient to offset the current strength of demand,” he added.

Mr Kusher said he expects strong sales figures throughout the remainder of this year at least.

“I would suspect sales volumes will slow where there is a significant and sustained lift in supply, which may not actually occur until next year.”

Buyer demand remains at near-record highs

Buyer demand on realestate.com.au slipped by 1% nationally for the second consecutive week last week and is now down 2.4% from its peak. But high-intent buyer demand is up 39.9% on last year – the third highest on record, according to the REA Insights Weekly Buyer Demand Report, released Wednesday.

Western Australia was the only state to buck the trend with demand increasing last week.

Mr Kusher said demand for property remains very strong with prices and sales volumes lifting.

“I expect that little will change over the coming weeks with demand likely to remain close to its historic high levels,” he said.

The REA Insights Weekly Property Search Report, released Monday, said buyer search volumes also dropped across every state and territory last week, but remained 51% higher compared to a year ago. 

Mr Kusher said search volumes are expected to remain high in the coming months.

“The next few weeks will see the year-on-year comparisons with lockdowns last year so the year-on-year change [in demand and search volumes] may be exacerbated somewhat,” he warned. 

Melbourne-based buyer’s advocate Cate Bakos said she expects the autumn selling season to deliver “broad pandemonium to mild panic” amongst buyers.

Melbourne-based buyer’s advocate Cate Bakos said she expects the autumn selling season to deliver “broad pandemonium to mild panic” amongst buyers.

“The interest rate cuts have filtered through and borrowing capacity is very high. Combined with forced lockdown savings and a sense of FOMO [fear of missing out], this market isn’t about to cool,” Ms Bakos said.

Ms Bakos said the current market conditions have dramatically increased competition for buyers.

“It has become really difficult [to buy a home] but it’s not entirely consistent across the board. Houses, particularly with more than three bedrooms, are going like hotcakes and the locale doesn’t really seem to influence this greatly, provided the home caters well to a study/workspace and a yard,” she explained. 

“Our preferences have really become skewed and larger dwellings have run to the top of the list. This hasn’t been restricted to metro and inner-ring areas, either.”

Ms Bakos said preparation is key to scoring a sale in the market right now.

“Be clear on what you want, be approved with your finance so that you can move immediately, do the comparable sales analysis to get a gauge of value. The market has moved and buyers need to be prepared to be armed with a margin on top of their appraised value if they want to secure a good property.”

Melbourne gearing up for another Super Saturday

Melbourne is headed for its third Super Saturday in the space of four weeks this weekend, with 1028 auctions scheduled. It follows Victoria’s Labour Day long weekend, which didn’t prevent a number of records and reserves from being smashed.

Sales director at Marshall White – Stonnington John Bongiorno said they have a big weekend of auctions ahead, including the four-bedroom home at 13 Beaver Street in Malvern East.

“There are a couple of buyers on it and they’ll be bidding there at the weekend,” Mr Bongiorno said. “We’ve had great numbers through the property.”

Short of another COVID-19 outbreak, strong auction activity is set to continue in Melbourne, according to Ms Bakos.

“Vendors are now seeing the news filtering into the market that is suggesting it’s an opportune time to sell,” she said.

“Following two difficult years of stop-start, and snap lockdowns threatening any campaign, vendors will likely remain a bit skittish, but the longer and harder our market forces become, the more likely we are to see those who have held back step forward.”

A case of ‘first in, best dressed’ in Sydney

There are 642 auctions scheduled for Sydney on Saturday, while 109 are scheduled for Brisbane.

Sales associate to Randall Kemp at Ray White – Woollahra Lisa Chadd said competition is so high across Sydney at the moment that some auctions are being brought forward.

The three-bedroom apartment at 66/299 Forbes Street in Darlinghurst is due to go to auction on 30 March, however buyer interest has been so strong since the property was listed five days ago that the vendor is seriously considering going to auction this Saturday, said Ms Chadd.

“There’s already enough competition to have an auction rather than waiting, because you are meeting your best buyers in the first week,” she said.

“We are [bringing auctions forward] a lot across the board at the moment. A lot of owners are just making that decision to take advantage of the heat in the market.”

The only way is up for property prices

Mr Kusher said Australian property prices have been growing since the middle of 2020, fuelled by strong buyer demand, low stock and historic low borrowing costs. 

Releasing the inaugural REA Insights Home Price Index report this month, he said price growth will likely continue throughout 2021.

According to the report, national dwelling prices rose by 0.4% annually in February 2021, taking them 5.9% higher than they were in February 2020. Capital city prices increased by 0.4% and regional prices grew by 0.3%.

While it is impossible to predict what will happen to property prices long term, Mr Kusher said they don’t look to be slowing down this year.

“There’s going to be strong price increases for the rest of this year and it could be as much as double-digit growth through 2021.”

Source: https://www.realestate.com.au