As a statewide lockdown turns Melbourne’s booming property market on its head, a property expert believes the city’s strong underlying market dynamic will prevail.
The Victorian government announced a statewide five-day lockdown on Friday to prevent a more deadly COVID-19 variant from spreading in the community.
Among other protocols, the lockdown put a ban on public gatherings, which instantaneously barred Saturday’s scheduled home auctions and numerous open for inspections.
“The Melbourne housing market has started the year with a full head of steam, with high auction clearance rates from seasonally high auction numbers, surging buyer and seller activity and prices rising strongly,” said Dr Wilson.
He explained that following the lengthy spring lockdown, the Melbourne housing market quickly re-energised with buyers and sellers reactivated in significant numbers.
This rise in post-lockdown sentiment was recently reflected in My Housing Market data, which revealed a 32.7 per cent increase in newly reported home sales in Melbourne over the week ending 7 February.
“Despite the autumn and spring lockdowns, Melbourne home prices finished 2020 higher than where they started the year,” Dr Wilson noted.
“The clear prospect for prices over 2021 was for an overall annual increase of up to 10 per cent with the local market in full catch-up mode from the impediments of recent years,” he added.
Although conceding that the new Victorian lockdown rules will “clearly impact” the Melbourne housing market in the short-term, through physical restriction on inspecting and transacting property, Dr Wilson opined “this will likely prove only a pause to what is clearly a strong underlying market dynamic”.
“However, the longer lockdown restrictions are in force, the longer it will take the market to recalibrate.
“And here’s hoping lockdowns will end sooner rather than later – and certainly not just for the sake of the housing market,” Dr Wilson concluded.