Less than two weeks out from the Spring selling season and lockdown conditions are in place across the Australia Capital Territory (ACT), Greater Melbourne, New South Wales (NSW) and major centres across the Northern Territory (NT).
In the decade prior to COVID-19, sales and listings volumes would typically rise from September to November, with the seasonal impact on prices fairly marginal, as both buyer demand and property supply would increase over the season.
CoreLogic Australia Head of Research Eliza Owen indicated there was a noticeable percentage difference between average sales and listings numbers through each of the seasons over the past decade, and the average for the entire decade.
The data showed that on a monthly basis, new listings added to the market for sale increased 15.7 per cent nationally compared to the full decade average (where new listings are advertised stock that has been freshly added to the market over the course of the month).
“This equates to a historic average of around 42,100 new listings added to the market monthly over the past decade, compared with 48,700 through months of Spring,” Ms Owen said.
“Sales volumes do not see as strong a seasonal effect, with around 40,000 transactions across Australia through the months of Spring, compared with 37,500 across the full decade average.
“Both sales and listings tend to be most seasonal in the capital cities rather than the regions, with the uplift in new listings volumes particularly strong across Spring time in Sydney and the ACT.”
In order to understand what this means for regions now in lockdown, some insight can be gained from housing market outcomes through Melbourne last year.
Lessons from 2020 lockdowns
Observing housing market performance through lockdowns reveals that both sales and listings volumes will fall through lockdowns.
“This means transaction activity is likely to be subdued across Melbourne, the ACT and NSW through the duration of the current lockdowns,” Ms Owen said.
Greater Melbourne was subject to a second wave of restrictions in 2020, from mid-July to late October, which was well into the 2020 Spring selling season.
There was a rapid and substantial reduction in new listings being added to the market over the course of the lockdowns through the second half of 2020, at a time when new listings would usually be rising consistently.
At its lowest count, just 1411 listings were added to the market for sale in the four weeks to September 6, which was 80.7 per cent below the previous five-year average.
CoreLogic indicated a combination of factors led to depleted listings in lockdown:
- Low levels of consumer confidence and the brief that vendors may not get an optimal price for the sale of their property.
- Mortgage repayment deferrals and government household support, which limited the sale of distressed property (people weren’t forced to sell).
- Property was harder to transact as inspections and auctions were increasingly conducted virtually.
- As the easing of restrictions was announced towards the end of October, new listing volumes began to rise rapidly, showing the elasticity of vendor behaviour around restrictions.
- Newly advertised stock recovered remarkably quickly following the easing of restrictions.
Notably, new listing volumes through December 2020 trended at an average of 40.4 per cent higher than the previous five-year year average.
This suggests the Spring selling season of 2020 was pushed back into the final months of the year, rather than being eradicated completely.
In 2021, CoreLogic’s data indicated there has been more volatility in listing volumes through shorter lockdowns, with volumes continually recovering as restrictions ease.
New listings throughout 2021 have also been more elevated than the previous five-year average. This may be the result of postponed selling decisions through lockdowns coming onto the market as COVID-19 cases were more contained.
Ms Owen also noted a similar trend could be seen in Melbourne across sales activity. It was considerably subdued through the extended lockdowns, but recovered well afterwards.
It was suggested this was due to the relative stability of the economy and housing market through COVID-19, which has allowed housing purchasing decisions to be postponed rather than abandoned.
