CORONAVIRUS COVID-19 PANDEMICRESEARCHRESIDENTIAL PROPERTY

Residential market performing better than expected

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EASING coronavirus restrictions across the major markets coinciding with the traditional spring selling season has prompted a surge of buyer activity and upwards pressure on home prices.

Andrew Wilson, chief economist at Archistar, said that with the easing of physical constraints to property transactions, housing markets and the economy are both now clearly finding their feet, and faster than many predicted.

The national daily new listings index increased by 21.4% over October compared to September, exceeding this year’s pre-coronavirus shutdown levels with new listing activity now similar to the same time last year.

Auction clearance rates continued to rise over October and into November despite a surge in listings, reflecting in a sharp revival In Melbourne new seller activity following the easing of a second shutdown.

Melbourne reported the highest average weekly new listings growth through October compared to September, at 155.9% – albeit from a very low base, while Sydney increased 2.9%.

Adelaide – which is heading into a severe six-day lockdown period – was up 4.6%, while Brisbane monthly new listings were down by 5.4%, and Perth by 13.7%.

Melbourne also reported the highest number of average weekly new listings over October, at 10.6% higher than Sydney. Sydney new listings were 42.3% higher than Brisbane, 54.9% higher than Perth and 71.7% higher than Adelaide.

Average weekly sales volumes across the country increased by 12% in October, compared to September, with Melbourne again the strongest performer with a 165.4% jump from small numbers. Adelaide was up 12.5%, Perth by 6.8%, Sydney 4.4% and Brisbane by just 0.2%.

Sydney reported the highest number of average weekly newly reported sales over October, 47% higher than Melbourne, 59.6% higher than Perth, 61.3% higher than Brisbane and 81.1% higher than Adelaide.

Perth reported the highest increase In average median daily asking prices for houses over October at 1.4%. House asking prices lifted in Melbourne by 0.7% and in Sydney by 0.3%, while falling 0.7% and 1.4% in Adelaide and Brisbane respectively.

The increased market activity has prompted upward revisions in house price forecasts.

Adelaide largest increase in asking price for units at 1.8%. Elsewhere, they were steady in Melbourne, dipped slightly in Perth, fell by 1.0% in Sydney, and grew 0.4% in Brisbane.

Unit rental market softens

Wilson said capital city rental markets continued to report diverging results, with significantly lower and falling vacancy rates for houses offset by higher rates for units.

“Closed borders have resulted in a surge of previous holiday rentals into the permanent market and a significant fall in demand from international students together with fewer prospective first home buyers who are now purchasing in near-record numbers.

“Higher demand for house rentals however may indicate a shift in preference for larger homes to cater for increased home-office requirements and a declining priority for residential proximity to CBD offices reflecting the shift to remote workplaces.”

Unit rents are now generally falling. Sydney recorded the sharpest decrease over the month, down by 2.9%, followed by Brisbane (1.6%), Melbourne (1.5%) and Adelaide (1.1%).

Perth saw a smaller drop while its house rents lifted 0.8%. Brisbane increased 0.2%, while Sydney fell 2.4%, Melbourne 1.6% and Adelaide 0.5%.

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