Lockdowns in three major real estate markets mean that the traditional spring boost to property listings will likely be delayed this year, with transactions continuing into the festive season as a result.
The lockdowns in the ACT and Victoria mean that in-person real estate inspections and auctions have been banned entirely, while in NSW restrictions have limited the volume of inspections that can take place and who can travel outside of Sydney to inspect property.
The restrictions on movement had led to a decrease in the number of listings nationally, according to Ray White chief economist Nerida Conisbee, despite the lockdowns only occurring in three jurisdictions.
"It could be the impact of lower levels of confidence, as well as difficulties of cashed up Melbourne and Sydney buyers to visit properties," she said.
Ms Conisbee said that regional markets were largely similar to their capital city counterparts in that spring was traditionally the busiest time of year for sales and new listings, allowing agents to make the most of good weather conditions and settlement to take place before the Christmas holidays.
"Historically this has been the case, although there are exceptions. For example, in locations that are popular holiday destinations, we sometimes see a pick up in sales over summer," Ms Conisbee said.
"Holiday destinations are a good example [of where the rule doesn't apply]. Selling in summer makes sense for many beachside destinations. We don't have many ski fields however similarly, selling in winter would likely make more sense here."
CoreLogic head of research, Eliza Owen explained in a recent research update that this traditional rise in listings was most pronounced in Sydney and the ACT and did not necessarily translate to an increase in prices.
"In 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.
But as with many aspects of the property market, Covid-19 has turned this conventional wisdom on its head - with the lockdowns likely to see selling continue well into December, a period when the real estate traditionally winds down for the year.
"Since COVID, the selling seasons have become less defined. For example, last Summer was particularly strong in Victoria because the state had just emerged from lockdown. Similarly, we expect a late start to the Spring selling season in NSW and Victoria because of lockdowns restricting seller activity," Ms Conisbee said.
Melbourne's 2020 market could indicate what is to come
Ms Owen said that what happened to Melbourne's market last year, when listings were delayed due to the city's extended lockdown then rose dramatically as restrictions eased in late October, provided an insight into what is likely to take place in 2021.
"Interestingly, new listings volumes through December 2020 trended an average 40.4 per cent higher than the previous five-year average, suggesting the spring selling season of 2020 was 'pushed back' into the final months of the year," Ms Owen said.
Conditions were ideal for a resurgence in activity, if and when the lockdowns lift, although rising affordability constraints could weigh on the strength of any recovery.
"There are tailwinds in place for housing market demand to suggest this may happen again; household savings rates remain elevated, new average mortgage rates continue to reach new record lows, and many government fiscal stimulus and broader institutional responses have been resurrected amid renewed lockdowns," Ms Owen said.
"This could see elevated transaction activity through the summer of 2021/2022 should restrictions be eased by then."
Ms Conisbee agreed that it was likely the spring selling season would extend well into summer.
"Given that lockdowns don't seem to be improving any time soon, I think we will. We can still see that buyers are out there and are getting frustrated by the lack of properties on market. Once lockdown ends, I think this will prompt sellers to market," she said.
Ballarat agent Jarrod Cloke, of Harcourts Ballarat, said that the effects of the traditional spring selling season in his city had been less pronounced even prior to the pandemic, a trend accelerated in the past year.
"Traditionally, over the years gone past [there has been an increase in listings], but not so much now. The market here is like everywhere nationally in that it's a sellers market," he said.
He is anticipating "droves" of Melbourne buyers who are wishing to buy in Ballarat and surrounds when the lockdown ends.
While listings had slowed during lockdown, there were still vendors who had to sell out of "need" rather than desire, often because they were moving between houses.
"There's always that factor in real estate," he said.
The current restrictions in Victoria meant that he had listings in the wings but would need to take time to arrange photography and marketing when lockdown lifts, meaning the selling season will be pushed out to later in the year.
"I've got listings waiting to go - if we were lucky enough to get photography done prior to lockdown we could have listed them," he said.
Jack Needham
Jack has been writing about real estate since 2015, covering residential and commercial property markets throughout Australia for the likes of Smart Property Investment and Domain. He has also spent time in the United States researching real estate trends, with a focus on housing affordability issues, for the California Association of Realtors.
Jack has been writing about real estate since 2015, covering residential and commercial property markets throughout Australia for the likes of Smart Property Investment and Domain. He has also spent time in the United States researching real estate trends, with a focus on housing affordability issues, for the California Association of Realtors.
