With lockdowns in place across many parts of the country, the usually busy Spring selling season is likely to play out differently this year.
Both sales and listing volumes may fall if the lockdowns persist. In Greater Melbourne, the ACT and NSW, we are seeing declines in transaction activity.
The good news is that once restrictions are eased, we will likely see listing volumes rise rapidly and newly advertised stock recover remarkably quickly, as was the case in Melbourne in October 2020. Sales activity has also been shown to recover strongly after extended lockdowns.
In areas affected by lockdowns, we may even see the spring selling season ‘pushed back’ into the summer months, if restrictions are eased by then.
Interest rate news
At its September meeting, the Reserve Bank of Australia (RBA) held the official cash rate at 0.10 per cent. The RBA’s decision was widely anticipated.
Last month, RBA Governor Philip Lowe said the board would not increase the cash rate until actual inflation was within the 2 to 3 per cent target range – a condition that will not be met before 2024. Meanwhile, a growing number of economists have speculated we could see a rise earlier than that.
Lowe noted that housing markets continued to strengthen, with prices rising in all major markets and strong credit demand from owner-occupiers, plus increased borrowing by investors.
Home value movements
Australian property prices continued to grow last month, but experts are warning the market is losing steam as affordability worsens.
“Along with declining home affordability, much of the earlier COVID related fiscal support (particularly fiscal support related to housing) has expired,” CoreLogic research director Tim Lawless said.
“It is however, encouraging to see additional measures being rolled out for households and businesses as the latest COVID outbreak worsens.”
“On the flip side, demand is being stocked by record low mortgage rates and the prospect that interest rates will remain low for an extended period. Dwelling sales are tracking approximately 40% above the five-year average while active listings remain about -26% below the five-year average. The mismatch between demand and advertised supply remains a key factor placing upwards pressure on housing prices,” Mr Lawless said.
|All dwellings||Auctions||Clearance rate||Private sale||Monthly home value change|
* Monthly Home Values figures as of 31 August 2021
* Australian auction results, clearance rates and recent sales for the week ending 5 September 2021.
* The clearance rate is preliminary and current as of 03:07 pm AEST, 6 September 2021.
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CoreLogic RP Data Daily Home Value Index: Monthly Values