The spring selling season will have an unusual start this year, with the COVID-19 pandemic tipped to impact the number of properties in the market and the volume of sales more than price themselves.
Research released by CoreLogic’s head of research, Eliza Owen, points to a subdued selling season.
“The intention to sell and buy property is evidently linked to consumer confidence, which in turn has been influenced by case numbers of COVID-19 and the stringency of government response in impacting economic activity,” Ms Owen said.
She points to slower transactions due to social distancing requirements to stop the spread of COVID-19.
“The first is the physical limitation of buying and selling property under social distancing rules. Property sales may be less scalable as fewer people can physically inspect, show and value property,” Ms Owen said.
“The second is the economic uncertainty generated by stage 4 lockdowns. As consumption falls and unemployment spikes, vendors feel less confident selling their property and getting their desired price.”
While the initial lockdown saw a sharp drop in listings nationally, the recovery was equally as fast, with a similar pattern emerging from sales volumes.
“However, once restrictions are repealed in Melbourne this time around, the recovery in transaction activity is likely to be weaker,” Ms Owen said.
That is because employment is taking another hit, consumer sentiment is dampened by the reality of a second outbreak of the virus, and a reduction in fiscal support is only a month away.
“Ultimately, the second round of restrictions across Victoria is likely to create a weaker ‘spring selling season’ than in previous years,” she explained.
However, in positive news for potential sellers, Ms Owen said demand for properties in Australia still remains.
“The low cost of debt and strong recovery in consumer confidence created pent-up demand for property as Australia got ahead of the virus curve. This was perhaps one of the few V-shaped recoveries observed amid the pandemic,” Ms Owen said.