How will lockdown impact the property market’s spring selling season?

Lockdowns might be bad news for Spring selling in Australia but there’s still hope because the buyer demand is high.

  • Due to lockdowns and restrictions, it is unlikely an elevated spring season will occur

  • Just like the year 2020, once the restrictions are lifted, the market will rebound during summer

  • The states with no lockdowns will see a normal spring selling season

Spring in Australia is usually regarded as the ideal time to sell your property. The pleasant weather with sunshine and fresh garden blooms bring out more buyers racing into open houses as possible over the weekend. In the decade prior to COVID-19, property sales and listings would typically see a rise from September to November. But, what does the selling season look like this year amidst lockdowns in Australia?

The Covid-19 pandemic has officially killed the momentum of the peak selling season. With lockdowns and restrictions on gatherings imposed across the nation, it has limited the traditional home auctions. To understand what this means for regions currently in lockdown, insight can be gained from observing the property market outcomes in Melbourne last year. When Melbourne opened up after the big lockdown during Spring last year, the volumes for property sales and listing went higher than usual.

The housing market performance with both sales and listings volumes will fall through lockdowns. The continued lockdowns in Sydney and Melbourne will result in a slow spring but once the lockdown lifts the property listings will go through the roof.

Meanwhile, the shutdowns in NSW, Victoria and the ACT extended into spring so it is expected that the selling season will be run at different speeds across Australia. The rise in the new supply of properties for sale is likely to come later into spring.

What are the reasons for the decline in property listings and sales during a lockdown?

  1. Low level of consumer confidence. The sellers believe that they may not get an optimal price for the sale of their property.

  2. Mortgage repayment deferrals and government household support — The property are harder to transact as inspections and auctions are conducted virtually. The distressed properties don’t make sales at all. 

  3. Fear of infections — property sales require gatherings and open house inspection so people are wary of going out of their homes.

Pandemic has changed the real estate market of Australia furthermore, online property auctions are also proving to be successful. Previously, the property market was more seasonal. Now, the market sees a record high volume in property listing and sales during unexpected months and seasons of the year.

Lockdowns have also accelerated digital transactions and the shift away from paper property transactions but there are apprehensions about the same. The markets don’t drop off dramatically and even if it falls, it immediately bounces back once the lockdown eases. Speculations say that there should be a surge in new listings in the affected property markets once the lockdowns end because the sellers seek a strong buyer demand.

Buyer’s agent and CEO of Property Buyer, Rich Harvey said, “Once we come out of lockdown we’re going to see a lot of frenetic activity. I think we’re going to see potentially a very late surge this year.” Talking about the states that are not under lockdown, the spring selling period will be vastly different for them. The season in Western Australia is expected to be normal compared to other states and territories.

“I think Brisbane will really fly this year. It’s definitely going to see a lot of ramped-up activity. The Brisbane market’s just going crazy, it’s so hot.” Mr Harvey said.

How are property buyers and sellers reacting to the lockdown?

Sellers are cautious during the lockdowns but buyers are competing for the limited homes available. It’s better to hire real estate agents who understand the market situation and offer the best advice and tips for property selling.

NSW, Victoria and the ACT but the new wave of COVID lockdowns and outbreaks are having effects on seller confidence. There’s a possibility that if a lockdown is imposed in other regions, it may lead to trepidation and sellers may not list their properties for sale. “The reality is in most areas of the country demand for property is far exceeding supply, with restrictions on inspections in some areas, vendors will probably be wary about listing because they don’t want to potentially leave money on the table in any sale,” Mr Harvey said.

Noticeably, the available stock of properties for sale continues to fall due to a lack of new stock and older stock selling. The demand is still strong with a large number of buyers competing for a small pool of properties. This is pushing the prices higher. For vendors, it may turn out to be a profitable condition but it might be difficult for them to secure a new property unless they are planning to move into a state with fewer restrictions. 

“The smart sellers will probably go to the market because it’s absolutely a sellers’ market at the moment,” Mr Harvey said. At this point, as a seller, your best shot is to find a local real estate agent with in-depth market knowledge to give you the best advice and property appraisal.

The borrowing costs remain at record lows so buyers have a level of urgency to secure a property. If there’s a lack of listings as we move through the Spring season, there might be more frustration among buyers if the prices continue to rise because of the lack of listings.

How is the spring selling season shaping up in each state?

Usually, after a dull winter, the spring season sees a big rise in new property listings and transaction volumes but how this spring season plays out will depend on the state and lockdowns. Despite the current slowdown in transactions, previous post-lockdown scenes have seen a robust recovery in sales volumes and seller activity.

Data shows that the suburbs in each state or territory have the most sales listings and volume in listings providing an indication of where there are opportunities for buyers this spring and for vendors to capitalise on the strong interest.

Here’s an assessment of how the spring selling season is shaping up in each state and territory

1. New South Wales (NSW)

Since NSW is under lockdown, it is likely to have some impact on the spring selling season. The demand for properties is high but the restrictions make it difficult to transact and most sellers prefer to sell under normal conditions. A surge in listings is likely to come once the lockdown lifts. 

2. Victoria

Melbourne’s sixth lockdown will now run until at least 23 September, when some restrictions will ease a little. After 23 September, private inspections may be permitted with rules like only one house inspection at a time and the agent staying outdoors during the inspection. One-on-one inspections are currently banned which makes sellers least likely to be prepared to bring properties to the market. Once restrictions are eased and new rules are implemented, it may encourage an increase in listings. 

3. Australian Capital Territory

Since The ACT lockdown has been extended until 17 September, it is expected to have a delayed start to an increase in the new listings. Once lockdowns end, the demand will rise which will also see a rise in listings. 

4. Queensland

Queensland is currently not in lockdown and assuming that COVID doesn’t get to Queensland, that there will be quite a strong lift in new listings. One thing that could impact the sales is that people from NSW and Victoria will not be able to inspect properties as they are under lockdown. In that case, it’s better to wait until borders reopen to list their properties, especially the sellers in lifestyle and posh locations. 

5. South Australia

South Australia is not under but has border closures in place. Few people leave the state which raises the demand for properties. Buyers and sellers both will benefit from the normal spring selling season conditions with new listings rising.

6. Western Australia

The WA government has strict border closures which is an added benefit for buyers and sellers living there. The state has seen an outflow of people migrating and residing in it. This has a positive impact on housing demand. The spring selling season in Western Australia will be closer to normal than in any of the states or territories.

7. Tasmania

The housing demand in Tasmania is highest from Mainland and Victoria areas which are currently in lockdown. There is a high local housing demand but the spring selling season may be a little bit delayed until lockdown eases.

8. Northern Territory

Interestingly, the Northern Territory is seeing a strong demand and price growth for the first time in many years. Spring selling season isn’t such a big thing in the NT but this year it is likely to see a rise in new listings over the coming months.

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