Traditionally a bumper time for real estate in Australia, the ‘Spring Selling Season’ is now upon us but you’d be forgiven for wondering whether it will resemble anything like it has in recent years.
Like many industries, real estate has undoubtedly felt the adverse effects brought on by the coronavirus pandemic, a pandemic that has influenced almost everything for most of this year.
Despite the difficulties associated with COVID-19, industry experts are predicting a sensational Spring in 2020, with market sentiment managing to remain high and a ‘mini-boom’ on the cards when all COVID-related restrictions are lifted.
We sat down with experts from industry leaders Harcourts Australia, to find out about their specific markets and what they envisage for Spring this year.
Brendan Whipps - Group Director, Harcourts Solutions
“Obviously, we were impacted the most through the March to April quarter. Since May however, we have been trending back to our normal numbers, in fact we had approx 700 groups through our properties every weekend last month, whilst the most we had through the initial COVID period was around 40.
“There are certainly buyers and a heap of demand but little stock on the market at the moment. We’re finding that prices are not just holding, they’re actually growing. If you take a look at one of our recent sales, 43 Whitecliff St, Albion, the owners bought it around 12 months ago for $1.18 million and with little to no work done, sold it for $1.275 million. I think that bodes well for the market moving forward.”
“I think spring is going to go really well. We completed over 850 appraisals during the winter period which tells me that there are a lot people currently in the ‘consideration phase’. Stock is low at the moment but if it starts to flow as confidence picks up, we are going to see big inspections numbers, plenty of buyer competition and multiple offers at properties that come onto the market.”
Tony Morrison - CEO, Harcourts Victoria/Tasmania
“I am amazed at how resilient the market is in Victoria, more than almost any state in the country, nothing seems to stop them buying or selling property. People just love real estate in Victoria. When we first went into lockdown in April, our sales probably went down about 30% but then in May we were almost back to normal. Overall if you look at the same 6-month period this year, it’s not that different than for the same time last year.
“We’ve even got offices in Melbourne for example that have had 5 or 6 sales over that 5-6 week shut down period. If you go outside greater Melbourne to Geelong or Ballarat and the numbers are quite incredible. In Ballarat, we had 32 sales completed last month which is almost a record and they were under Stage 3 restrictions. Pakenham, which is in Stage 4, completed 13-14 sales and they can’t even hold inspections - it’s been pretty amazing.”
“Once lockdown finishes, if you’ve got a house to sell, I can tell you they are selling quickly, getting multiple offers and great prices. All things considered the market is good. So far there is every indication that we are going to experience a boom after restrictions are eased and our extremely resilient agents are very optimistic about the spring this year.
Brett Pilgrim - Business Owner, Harcourts Pilgrim
“It’s been an interesting one for us as the very first COVID case in SA decided to come to one of our auctions, so we were shut down and into quarantine before any restrictions were even put in place. This was good for us in a way as we put a plan in place very early on, we started working with less people at the office, sanitiser stations, embraced online meetings, opens and auctions. When SA had restrictions put in place, we were already operating within all the guidelines.
“We have certainly seen less desire to go to market and across the board less listings, this has really given the buyers less choice and therefore maintained pricing pretty well across the board. We are finding that what we are bringing to market is going really well at the moment and numbers at open for inspections have actually increased.”
“Initially, there was concern we could have a large influx of property that could affect prices and although I think that comes at some stage, to a degree I still think people are holding back which to us feels like the spring market will hold quite well. Even though there seems to be not too much online, I think a lot of agents like us have a large number of off market opportunities, so if you’re looking to buy, talk to local experts on what they might currently have for sale.”
New South Wales
Nicole Jackson – Business Owner, Harcourts Jackson Power Property
“When COVID first hit there was a certain level of uncertainty from sellers but properties did continue to sell albeit not as quick as they would normally. The last 5-6 weeks however the market here (NSW Central Coast) is probably as hot as it was in the beginning of 2017. We’ve found that a huge amount of lifestylers want to get to the central coast now they are not having to commute to work and have the freedom to work from home - our area has become very attractive to those who want to move out of the city (Sydney). Add to that low interest rates and we’re seeing properties here maintaining if not increasing in value, there has been a real surge in buyers.”
“I think we started Spring early! Traditionally Spring is when people think about putting their house on the market so there will be more that comes on - we have another 3 properties coming on this week ourselves. If you’re a buyer, you need to be at the very first open for inspection as properties are just not lasting. There are also probably a record number of off-market properties being sold at the moment so I think you need to be very clear on what you are after, speak to agents and be in constant contact with them. Make sure you have your finances organised too, homeowners are not going to wait for finance clauses to be realised, there is so much demand that they really don’t have to.
“With regard to property management, when we advertise a property we are inundated with enquiry and applications. There are many Sydneysiders looking to escape the city and move to the Central Coast for the lifestyle and now with the added bonus of not having to commute every day and being able to work from home the Central Coast is even more attractive!
“We have converted a number of Holiday Letting properties over to permanent rentals which has been beneficial and provided Landlords with a stable stream of income during the uncertainty of COVID-19.”
Paul Blakeley - CEO, Harcourts WA
“It’s actually gone a bit nuts to be honest! We’ve had offices that have had record months and as a state, we’ve had the best number of written sales in our 13-14-year history, it has been quite amazing. Construction incentives have seen a big rise in demand for land and land sales which have contributed to us exceeding our targets. We’ve come off 5-6 years of the worst market in WA for over 30 years, so we really didn’t have anywhere else to drop.
“At the start of the year values started to improve so before COVID hit we were gearing up for a big year. Uncertainty set in when COVID first hit but we then bounced out of the blocks really fast due to low interest rates, government incentives and high buyer demand. Vacancy rates are also way down so the market is really ticking along a lot better than anyone anticipated.”
“Spring is traditionally our biggest time of the year in terms of listings, but we have seen a little tightening of stock coming onto the market recently. Our guys are pretty heavily focused on putting deals together off-market at moment as sellers are still a little cautious around the COVID pandemic - it’s all new territory for everyone, so only time will tell. In terms of buying, if you are in the market now, I would suggest getting pre-approval from your bank as soon as possible. Do your research, get finance approval and if you see a property you like, don’t wait, get your offer in and make it a competitive one.”
Vicky Devine – CEO, Mortgage Express, a partner of Harcourts
“The home loan space has quickly adapted to the impact of COVID-19 conditions, moving to meet changing “market variables” and customers taking advantage of various eligible stimulus packages.
We have seen significant opportunities within the refinancing market as home loan owners have capitalised on getting themselves ‘financially fit’ during COVID.
“The ability to reduce your biggest cost base (home loan) has never been a better, the average home loan client in Australia continues to be 3.25%p.a. variable, when we have offerings in the market now of 1.99%p.a fixed 3 years, makes sense to take the time to work out your savings.’
“We saw ‘market variables’ change as banks risk appetites moved and naturally lenders were seeking comfort and taking a deeper look at customers incomes and expenditures patterns.’
"Then we saw instances of fear, ‘these are people’s homes, their safe space where they care for their families’ and consequently saw significant energy and uptake within the Deferred Home Loan options.
“Overall, we have seen an unprecedented home loan market that has been driven by refinance, first home buyer activity and preapprovals as customers prepare for spring.
“With supply tightening we are seeing a significant uplift in refinancing, preapproval and first home buyers as people get their finances in order to purchase.
“Customers are taking advantage of the government stimulus packages, which are stackable (First Home Loan Deposit Scheme, First Home Buyers Grants and Home Builders Grant) and naturally buyer enquiry in this market is strong.
“Interest rates will remain low into 2022 as a nation we continue to work those post-COVID economic impact, which property will play a very important part of.
“We will possibly see RBA reduce cash rate to .10% as we move closer to Christmas to stimulate retail trade, but resistance to negative rates remain.
“Lenders will continue to take a deeper dive into clients income and expenditure habits give COVID economic impacts and will be looking for comfort in the security values.
“Those on Deferred Home Loans, will need to give consideration to addressing their ability to move back to some form of acceptable loan repayments, alternatively seek out your local Harcourts agent in controlling the sale process.
“Preference is to not be caught up in an Urgent Sale process and be in control. Lenders are working hard to provide suitable and agreeable options, but suggest customer get on the front foot talk to your broker and be clear on all your options.
“Talk to your mortgage broker on how to ensure you are financially fit to capitalise on the incredible Home Loan rates, packages and then be in a position to know with confidence you can purchase your home.”
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