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The calm before the storm.

  • belindacassano
  • May 29, 2024
  • 2 min read

With so many unable to work and movement highly restricted, it is little wonder we are uncertain of where real estate will head in the coming months.


The current Sydney lockdown has led many homeowners to rethink their housing plans, essentially putting their plans on ice until the city opens up again.


The question is, when will that be?


Vaccination uptake in Australia has been decidedly low. And with good reason. Publicity about potential side effects, coupled with little or no risk of community transmission of the virus, discouraged any sense of urgency amongst the community.


That all changed when the delta variant of COVID-19 made its way across our border. We are now seeing exponential uptake of the vaccine but are realizing that we left that too late.


When this coronavirus first hit our shores in early 2020, we were watching the tragedy unfold across the globe. Understandably, making lifestyle decisions like a non-urgent housing relocation was not a priority as the uncertainty of our future was unknown.


A few months later, when we realized we were not going down the same path as other countries and we seemingly had the virus under control, the property market entered a boom phase. The outbreak in Melbourne mid-year caused another hiatus in the market but we quickly bounced back to finish the year on an upward trajectory once more.


Enter 2021 and prices surged. Buyers were in abundance and demand was far outstripping supply. The market did not falter until June when the delta variant began its highly contagious incursion on our city.


What has been surprising is that research shows that even though lockdowns the market remains remarkably resilient. The following report from CoreLogic reveals some key findings from lockdowns and may indicate what we can expect once we open up again.


  • Auction results across Sydney and Melbourne have remained resilient in lockdown, particularly circuit-breaker lockdowns, although a larger than normal number of auctions are typically withdrawn, postponed or sold prior to the auction event.

  • Transaction activity slows markedly through lockdown periods, however a ‘catch up’ in home purchases has been evident as restrictions ease.

  • Property values have remained resilient through lockdowns and have seen strong growth as social distancing restrictions eased.

  • Stability of housing market values is likely subject to extensive government stimulus and institutional support for the sector; a factor which is far less certain going forward.


Evidence from the last extended lockdown in Melbourne showed a decline in property listings during the lockdown followed by a dramatic surge in listed properties and sales post lockdown. Demand wanes in lockdown and sellers get nervous leading to an overall drop in inactivity.


However, we continue to have strong demand from buyers at present and with stock levels so low and very little to choose from, they are still willing to pay a premium. Come spring, which could possibly coincide with the lifting of restrictions, the market will likely be flooded with new stock providing buyers with a lot more choice and less competition. The market will in effect shift from being a sellers’ market to more of a buyers’ market.


Published August 24, 2021

 
 
 

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© 2024 by Belinda Cassano.

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