How is the property market doing it?
I’m starting to think that the property market is bomb-proof.
And if not bomb-proof, at least pandemic proof.
Because look at what’s happening. With three quarters of the country in lockdown, properties are still selling like hot-cakes, and auction clearance rates are through the roof:
From the AFR:
Big property sales are still being recorded in the Sydney, Melbourne and Canberra markets despite increasingly onerous lockdowns, while the rest of the country powers on with high prices and conversion rates.
Sydney’s initial clearance rate reached 83 per cent last week with almost two-thirds of properties sold before the scheduled auction day as agents, often dealing with fewer prospects, pushed to quickly close transactions.
In Melbourne clearance rates were much lower at 63 per cent. Property data company CoreLogic, which tracks auction results, said its numbers were dragged down by a high withdrawal rate of 31 per cent.
However, there were some major sales, including a five-bedroom home in Brighton bought after two inspections for $9.7 million.
In Canberra, which went into lockdown on Friday, auction clearance rates were high at 82 per cent.
Adelaide had the nation’s best clearance rate with 85 per cent of houses sold (no apartments were auctioned in the city) for a median price of $810,000.
Nerida Conisbee, chief economist at Ray White, Australia’s largest real estate agency, said fewer owners were taking properties to market but buyers remained active.
“While sellers are holding out, we have not seen a similar hit on buyer demand, and the average number of active bidders nationally in July was at 3.7 per property,” Ms Conisbee said.
She said Sydney listings were tracking at record levels in June before the lockdown was imposed late that month.
“They were up 24 per cent compared to the previous year and up 90 per cent compared to June 2019,” she said.
Ms Conisbee said July listings were down 26 per cent over June and 23 per cent less than the same month last year.
“Sellers have become more hesitant over lockdown and this has also impacted the number of auctions proceeding with many moving to private sale or selling prior,” she said.
I mean think about what’s going on here. People in lockdown became very focused on their living situation. You don’t normally have to spend 24-hours a day in your home, but now that you do, you start to notice everything that’s ever bugged you about it.
And what else are you going to do with your time but trawl real estate listings on the internet?
We saw this in the first phase of lockdowns. Search activity boomed, and sales spiked.
It’s the same story this time around, and this is what we’re starting to understand. Lockdowns juice the property market.
And so think about where we go from here.
If we get more lockdowns, we juice the property market.
If we get out of lockdown and open up again, an accelerating economy will juice the property market.
There just doesn’t seem like there’s anyway to lose from here.
The property market is pandemic proof.
JG.