Nothing’s going to take the heat out of this market.
All my ears on the ground are telling me the market is scorching hot right now. Even here in the lockdown capital of Melbourne.
I’ve been hearing this from a few sources. But it’s also no secret. The AFR was running a story on the weekend about desperate homebuyers knocking on people’s doors, begging to buy their houses:
Families desperate to buy before house prices rise even further have resorted to knocking on doors in locked-down Melbourne to circumvent the state’s ban on inspections.
This is according to the country’s biggest real estate agency, Ray White, who noted the trend as two out of five auctions in Melbourne were withdrawn over the past week by nervous vendors, exacerbating already low listings levels, fuelled by previous lockdowns.
Ray White Victoria and Tasmania chief executive Stephen Dullens said “red-hot demand” from buyers and an extended ban on inspections in Melbourne (in contrast to Sydney where private one-on-one appointments are allowed) was starting to create unforeseen issues.
“With the lockdowns in Melbourne continuing to extend, we’re seeing more and more customers becoming desperate with an urgent need to buy, sell or lease property,” Mr Dullens said.
“Across the industry, concerningly, we are seeing more and more examples of customers taking matters into their own hands.
“We have many examples where prospective buyers have knocked on the door or written notes to sellers, pleading for access to their homes. This occurs after being advised by the sales agent that an inspection isn’t possible.”
Mr Dullens said this led to the risk of the creation of an unregulated environment.
“An environment where surfaces aren’t cleaned, social distancing isn’t maintained and contact tracing isn’t possible, presents a substantial health risk to the community,” he said.
Highlighting the heightened demand and limited opportunities to buy, more than half of homes due to go under the hammer in Sydney and Melbourne this week sold prior to auction.
Yeah, ok. I reckon the real estate agents are worried about ‘unregulated’ sales because there’s no commission or auction fee if an agent isn’t involved. But still, the point stands.
Demand is hot right now.
You can see this is the search data as well. Realestate.com.au publish data on search activity on the website.
It shows that the number of views per listing of properties for sale on realestate.com.au, hit an all-time high in August, ahead of a delayed spring selling season in locked-down markets:
So we’ve got a perfect storm here. Demand is strong, but lockdowns are keeping supply from the market.
The total number of listings on the market right now is a full 30% below normal levels.
And when you get demand like that and supply like this you get…?
You guessed it.