It was a tale of two cities on the weekend, with the number of auctions in Sydney up 18 per cent compared to the same weekend last year. Meanwhile in Melbourne, vendors have virtually disappeared from the equation with only 28 homes being tested at auction, a 96 per cent drop from last year.
Spring is historically the beginning of the ‘property season’, but the COVID restrictions have created challenges down south. During normal circumstances, you would expect at least 600 properties to be going to auction at this time of year.
“Melbourne’s auction market was dead on arrival this weekend,” SQM Research managing director Louis Christopher said. “This is an absolute disaster for the economy and for the state government revenues. It’s catastrophic for real estate agents who are getting smashed right now, as they rely heavily on sales turnover for income and currently not getting any sales.”
Sydney meanwhile, where public inspections and onsite auctions are permitted, had a clearance rate of just under 70 per cent over the weekend, demonstrating sustained demand fuelled by lower interest rates and relative freedom in the marketplace for buyers, sellers and agents to facilitate these transactions. These numbers correlate with a housing market on the increase. A total of 625 properties went to auction in Sydney, significantly higher than the 528 recorded last year. Activity in the Sydney property market is outperforming the rest of the country, with the total number of auctions Australia-wide 24 per cent lower than this time last year.
Across smaller capitals, Brisbane recorded a 60 per cent auction clearance rate, 79 per cent were cleared in Canberra and 69 per cent were successful in Adelaide. The common denominator across all of these markets is the low case numbers, which means social distancing measures are not hindering real estate transactions.
However, these performances are tempered by the fragility imposed by a pandemic which still looms large across society. The property market relies on the number of active cases being under state government thresholds as is demonstrated in Melbourne, when restrictions are implemented the impact on the property market can be severe. The Victorian government has extended the ban on onsite auctions and property inspections until October 26th.