Sydney is set for a spring selling season like nothing it has ever seen before, but that’s not stopping homeowners from trying to cash in on the city’s rapid price growth.
The usual crowds, hopeful bidders and booming voice of the auctioneer will be missing from the streets of Sydney as public auctions – one of the city’s favourite spectator sports – remain banned, but there are early signs more sellers could be coming to the market.
New listing numbers have been on the rise in recent weeks, Domain data shows, after falling sharply when lockdown hit. And buyers are still out in force more than two months into lockdown, with bidder and inspection numbers lifting along with the city’s auction clearance rate percentage – which has been back in the high 70s and 80s for the past four weeks.
It comes as Sydney property prices continue to climb, albeit at a slower rate. CoreLogic figures released this week showed property values rose 1.8 per cent in August and are now up 20.9 per cent over the year.
Nicola Powell, chief of research and economics at Domain, said strong buyer demand and limited supply – as many homeowners delayed plans to sell when lockdown began – were continuing to push prices higher. The number of properties for sale in Sydney fell 5.6 per cent last month, down 23 per cent year-on-year and a multi-year low for August.
“We’ve had such high levels of demand compared to new supply coming onto market, particularly in Sydney where buyers unable to secure a home earlier in the year due to extremely fierce competition are utilising lockdown periods to purchase their homes,” Dr Powell said.
However, more homeowners look to be coming around to selling in lockdown, with new listing volumes lifting almost 10 per cent over the four weeks to August 29, though this was still down about 15 per cent year-on-year. More than 460 Sydney properties are scheduled to go under the hammer on Saturday, surprisingly making it the busiest start to the spring auction season since 2018. However, volumes are still 19 per cent below the average of recent years, and many homes are likely to sell early.
It has been a different story in Melbourne, where one-on-one inspections have been banned until 70 per cent of Victorians have received at least one dose of a coronavirus vaccine. New listings have dropped more than 20 per cent over the past four weeks, while the city’s clearance rate dropped to 38.2 per cent last Saturday.
Dr Powell said the continuation of one-on-one inspections had allowed an element of normality to remain in Sydney’s market, noting the impact on listings had not been as stark as expected.
Thomas McGlynn, head of sales and chief auctioneer at BresicWhitney, said there had been a noticeable change recently, with the past week being the agency’s strongest for new listings in a month.
“I think that people realise we are going to be in some form of restricted environment probably until the end of the year, and people are starting to feel like they have put their plans on hold for long enough,” Mr McGlynn said.
He said he hoped spring would give more sellers the confidence to push forward, and believed there was enough buyer depth to support a 30 to 40 per cent increase in listings.
Maroubra sellers Brad and Rosie Fensom are among those who have decided to sell in lockdown, keen to take advantage of the strong competition for the reduced supply of homes.
The pair had been considering upgrading from their family’s five-bedroom home for a year, before finally listing it for auction later this month with a $3 million price guide.
“We decided now was the right time for us; there’s very little stock on the market and we’re seeing some incredible prices in the local area,” Mr Fensom said. “The lockdown was more the catalyst for us to sell [than a deterrent].”
The decision is likely to pay off, with their sales campaign already one of the strongest which selling agent Simon Nolan, of McGrath Maroubra, has had this year. It’s one of four properties his team has up for auction this month, down from the 10 they would typically have listed in September.
Mr Nolan said he was increasingly seeing pre-auction bidding wars between buyers afraid of missing out on homes yet again, with the strongest demand coming from upsizers keen for more space in lockdown and encouraged by record-low interest rates and increased savings – for those in stable jobs.
He expected to see a pick-up in listings post-lockdown, and stronger market activity than usual over the summer as sellers made up for lost time.
NAB chief economist Alan Oster said the Sydney property market looked to have passed its peak in terms of price growth, due more to affordability constraints than lockdown, but expected Sydney prices would continue to rise and predicted growth of 2 to 5 per cent next year.
While property prices in Melbourne had gone into catch-up mode after its extended lockdown last year, the same would be unlikely in Sydney when restrictions lifted, Mr Oster said, given the significant price growth already seen.