National lockdowns are not only dampening spirits but also dampening Australia’s surging property market – as would-be sellers postpone auctions or delay listing their properties altogether.
The lockdown resulted in 11% being rescheduled, with 672 properties going to auction at a 71.6% clearance rate.
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Although vendors forged ahead with online auctions, many properties sold before making it to auction day.
Almost 60% of the properties scheduled for auction in the first week of July were settled before auction, and 23% of auctions were delayed or withdrawn.
Lockdowns are also disrupting when and how would-be buyers can view listed properties with open homes banned, making way for time-consuming and limited private inspections.
Even with the slight dampening of the market and decline in new listings, Realestate.com.au Head of Economic Research Cameron Kusher said that there was enough momentum in the market to quickly bounce back once the lockdown is lifted.
“The lesson from Melbourne’s four-month lockdown last year was that restrictions discouraged sellers more than buyers.”
“The Melbourne lockdown didn’t impact as much you’d think, there was a drop in sales activity, but there were still committed buyers.”
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“Sydney’s lockdown is not as strict, and that will make a difference. There are also tools that make it a lot easier to view (homes) without stepping foot on the property,” he said.
Mr Kusher added that those wanting to nab a property bargain would probably be disappointed in this time of short supply and continued demand.
CoreLogic’s auction data for July 2021 supports Mr Kusher’s outlook, showing Melbourne’s quick return to business as usual when the lockdown lifted at the start of July.
Ray White Chief Economist Nerida Conisbee said that the restrictions would most likely not stop keen buyers from making a purchase but instead influence the kind of property they settle on.
“The experience of previous lockdowns was that increased time at home often encouraged families to seek out bigger properties in lower-density areas.”
“Lockdowns last year encouraged more people to look outside of capital cities to regional areas where they could get bigger houses. It happened everywhere, but the trend was strongest in Melbourne,” she said.
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Sellers hesitant to list properties
“It leads to a hesitancy to list your property because of the ongoing uncertainty, and that is probably an impact right throughout Australia.”
“For buyers it is, of course, traumatic, especially if they have sold and desperately need to find somewhere to live,” he said
Outlook for the property market
Despite the effects of the lockdown, expert economists still predict that prices will continue to boom.
Westpac Chief Economist Bill Evans and Senior Economist Matthew Hassan raised their forecasts for the 2021 property market due to the strong growth seen in the first half of the year.
They now expect a nationwide surge of 18% this year, including a 22% gain in Sydney.
Mr Evans and Mr Hassan echoed Mr Kusher’s sentiments, predicting that the property market will bounce back once restrictions ease.
“Price growth may stall altogether, particularly in Sydney where restrictions look set to last for some time yet.”
“However, any slowing is very likely to be transitory with easing restrictions and a national economic rebound driving a subsequent reacceleration,” they said.
Words by Nell Matzen
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