Weekly Real Estate Market Update with Leigh Martinuzzi
It appears that for many of us here in Australia, we are becoming settled to the “new normal” of how we do things due to the lasting effects of the COVID pandemic. Uncertain times indeed, however, as a species of progression and with an innate desire to get on with life, we are more confident in doing what we can to make things work. Not easy, not ideal, and not as many of us would wish for, however, over time we are seeing that we are becoming more resilient to the current situation.
Even when lockdowns ease in NSW and Victoria, it is unlikely we will be living in a COVID-zero climate and how we live our lives will likely continue to remain different from how we did in the past. Who will work, what will travel look like, how will the economy be impacted are all things that remain a very big question? With positivity top of mind, this too will pass, and we will find a way to live happy free lives.
For now, it’s business as usual in an unusual way and the real estate industry seems to be more resilient to continued government restrictions as we move forward.
An article I’ve read this week highlights how consumer sentiment at the start of the pandemic in 2020 decreased more dramatically by as much as 40% than it has during the current 2021 lockdowns which from peak to trough has fallen by about 12%. The difference in consumer confidence is directly observed in property sales volumes also.
In 2020 when the pandemic hit sales volumes fell by up to 40.3%. Compared to 2021, sales volumes are down in the affected states but not by as much, with Sydney reporting a decline of 3.7% in July. These will likely continue to fall as lockdowns continue however, it seems people are getting used to the “new normal” and taking advantage of technology to make their buying and selling decisions.
There are many reasons for this shift in consumer confidence. One thing to note is that during 2020 lockdowns and restrictions household savings have climbed dramatically and now well-off individuals have more money to put into other things, like property investments or caravans. When the pandemic first hit, employment fell by up to 600,000 however more recently there are fewer people whose employment has been affected. Also, the RBA cash rate remains at an all-time low, still at 0.1% so money is cheap! Properties owners are also taking advantage of the equity in their homes as property prices across Australia continue to rise.
I am very cautious to give my opinion in the current situation however most people are interested to hear them. I generally feel that the conditions caused by the continued lockdowns in NSW and Victoria will have an economic impact and likely affect the lives of many in adverse ways, it’s hard for me to imagine. I do see that the local property market will continue to surge however I imagine it will slow down considerably within the next 6 to 12 months. Once eased restrictions are given to southern states, we will see another surge in prices here on the coast, and not long after that, I predict we will see a steadying or declining market. However, I am often wrong, I am married, and only time will tell.
If there is anything at all I can help you with please give me a call anytime.
Preliminary Auction Results State by State. (Auctions/Private Sales)
- Queensland – =75% (124/1480)
- NSW – 91% (356/1666)
- Victoria – 91% (99/1240)
- ACT – 95% (20/56)
- South Australia – 90% (86/408)
- Tasmania – NA (0/211)
- Western Australia – 67% (3/800)
- Northern Territory – NA (1/25)