After some weeks of uncertainty and restrictions on real estate activities, the real estate industry has recently experienced a good share of uplifts.
With restrictions on open homes and auctions lifting across Australia, the final weighted average clearance rate also experienced a little lift according to latest data from Corelogic, coming in at 62.7% last week, the highest result since the week ending 15th of March - just before lockdowns were imposed.
This result was across 612 scheduled auctions, again higher than the week prior (417), but significantly lower than the 2,055 auctions held over the same week last year.
While there are some great reasons to begin feeling some optimism about the property market, it’s important to consider other factors that may affect the value of Australian property as a whole in the coming months.
But what lies ahead for the property market?
Marginal decline in housing values: Housing values held stable over April, showing only a mild slowdown. In early May, capital city housing values fell by less than half a percent over a month.
With Australians flattening the spread of COVID-19 much earlier than originally anticipated in addition to the easing of restrictions, a quicker return of economic activity is expected to support the lift in consumer confidence, which could reignite housing market activity.
Stock volume ~25% lower than this time last year: CoreLogic data shows that the amount of stock available for sale was around 25% lower than it was this time last year. The decline is also indicative of a lack of distressed sales coming to market. The leniency given to borrowers affected by COVID-19 shutdowns was provided by Australian banks, and interest rates holding steady at 0.25% for likely years to come are key factors in helping limit the amount of these distressed sales.
Rent to be affected more than property prices: A -0.4% decline in rent prices nationally across Australia over April shows a direct effect of the falling employment rate. Available jobs have drastically fallen across accommodation, hospitality, and arts and recreation services - a workforce generally dominated by the young, who are more likely to be renters. It is likely that a reprieve on mortgage repayments at a time of rising unemployment and falling wages will help to continue to insulate home values.
The best way to know the current market value of your property is to get a free, no obligation appraisal from your local Upside agent. As part of the process, we also supply a detailed market report of your properties that have sold in your immediate area in the last 3-6 months.