Considering selling in Spring?
What that might look like amidst ongoing lockdowns
As we enter the spring selling season, lockdown conditions are in place across the Victoria, NSW and the ACT.
More recently, major centres across the Northern Territory have also been plunged into a snap lockdown.
CoreLogic’s Eliza Owen reports that the decade prior to COVID-19, sales and listings volumes would typically rise from September to November.
“The seasonal impact on prices is fairly marginal, as both buyer demand and property supply would increase over the season,” Ms Owen said.
“The data shows that on a monthly basis, new listings added to the market for sale increased 15.7 per cent nationally compared to the full decade average, where new listings are advertised stock that has been freshly added to the market over the course of the month.
“This equates to a historic average of around 42,100 new listings added to the market monthly over the past decade, compared with 48,700 through the months of spring.
“Sales volumes do not see as strong a seasonal effect, with around 40,000 transactions across Australia through the months of spring, compared with 37,500 across the full decade average.”
Both sales and listings tend to be most seasonal in the capital cities rather than the regions, with the uplift in new listings volumes particularly strong across springtime in Sydney and the ACT.
In order to understand what this means for regions now in lockdown, some insight can be gained from housing market outcomes through Melbourne last year.
“Observing housing market performance through lockdowns reveals that both sales and listings volumes will fall through lockdowns,” Ms Owen explained.
“This means transaction activity is likely to be subdued across Melbourne, the ACT and NSW through the duration of the current lockdowns.”
“Greater Melbourne was subject to a second wave of restrictions in 2020, from mid-July to late October, well into the spring of 2020.”
“It showed a rapid and substantial reduction in new listings being added to the market over the course of the lockdowns through the second half on 2020, at a time when new listings would usually be rising consistently.
“At its lowest count, just 1411 listings were added to the market for sale in the four weeks to September 6th, which was 80.7 per cent below the previous five-year average.”
A combination of factors led to depleted listings in lockdown, including low levels of consumer confidence, and the belief that vendors may not get an optimal price for the sale of their property.
Also, Mortgage repayment deferrals and government household support limited the sale of distressed property – i.e., less people were forced to sell.
Lastly property is simply harder to transact in lockdown conditions as inspections and auctions are increasingly conducted virtually.