Property market proves resilient in the face of growing virus threats

AUSTRALIA’S property market was in full health this over the weekend despite a noticeable lift in the risk of contagion.Agents declined to shake hands and encouraged bidders to keep their distance at auctions, but attendance figures remained high and many homes sold above reserve.
The 2,220 auctions across the country returned a preliminary clearance rate of 70.6 per cent – much higher than the 51.4 per cent from the same weekend in 2019.
The number of homes sold under the hammer was 52.5 per cent higher than the previous weekend (1456), which saw much lower volumes due to public holidays in four states and territories, and 18.4 per cent higher than the year before (1875).
CoreLogic auction commentator Kevin Brogan said the results showed the virus outbreak had not yet had a major effect on the existing “seller’s market”.
“In that context, I think these are really strong results.
“We did see a little bit of a dip overall, but the clearance rate across capital cities on a preliminary basis is still sitting above 70 per cent, which is quite strong.
“It’s not really possible to look at these figures and determine that the coronavirus has had a marked impact on the auction results – although there are perhaps other things that it may have impacted on.”
The growing risk of infection has encouraged some agents to shut down open for inspections and replace them with private viewings, Mr Brogan said.
And bidders are keeping their distance, wearing gloves and using more hand sanitiser.
“But if you were a potential purchaser and you’ve been watching a property being advertised for three weeks and you think ‘this is the one’ – are there are other behavioural changes that you might make that are short of pulling out and not bidding at the auction?” Mr Brogan said.
“If you were going out to see a show, you might drop 50 bucks on a ticket if you don’t go.
“But if you’re looking at buying a house and it’s effectively one of your major life decisions, then you may look at any number of actions you might take short of going ‘Ah, look, I’m just not going to buy a house’.”
Mr Brogan said although it was important not to underestimate the impacts of the virus on the property market and the broader economy, the space for certain behavioural changes would likely prevent attendance figures and clearance rates from falling off a cliff.
His colleague, Eliza Owen, previously said housing’s illiquidity would prevent property prices from going the same way as shares.

– WITH REALESTATEVIEW.COM.AU