April Upsizers and First Homers lead lockdown buying.
During April more than 419 online auctions were reported to the Real Estate Institute of Victoria (REIV). There were 81 sales with 62 properties passed in. 12 of those on a vendor bid. The aution clearance rate averaged 80.5%, up on March’s 74.5%.
Despite the frustrating lockdown determined home buyers are still active, with Upsizers and First Home Buyers supporting an otherwise besieged market.
The motivations to buy a first home, or to upsize to a more suitable one, have emerged as the most powerful drivers in current conditions. People have life-plans they want to take forward. In the case of growing families upsizing often becomes a necessity.
As Australia’s infection rates slow down, people can see a return to more normal conditions getting nearer. With a brighter outlook, plus the Government’s JobSeeker support, and the pause on mortgage repayments, underlying property values are being preserved. Lower listing volumes are also acting as a buffer for values. Competition amongst buyers for the limited stock remains strong.
Market peaked in February
Record median auction prices were achieved in the March Quarter (Domain data) on the back of the extraordinary home value resurgence in the second half of 2019. Prices peaked in February, but median auction prices had already starting to ease before Covid-19 impacted.
The auction median was $1,017,750 in February. $972,500 in March. The biggest shift down came in April with an auction median price of $905,000 (Domain). But fewer homes being listed and sold, along with the transition from public auctions to online auctions, would adversely affect the veracity of the April figure. But overall across the quarter there is a 10% easing since the peaks of February.
Western Australia, Queensland and South Australia have started lifting restrictions. Victoria will follow as we go into May, given there are no outbreaks.
When we see more returns to work and better economic security that follows that, home prices are likely to see a bounce back.
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