Search volumes on Australia’s real estate portals continue to increase as buyer interest is quickly returning, post-COVID lockdowns.
According to the latest data from realestate.com.au, national search volumes are now at record high levels with a number of states seeing strong levels of interest.
Traditionally, transaction volumes fall away through the Christmas period from late December until February, but this year looks like it will be the exception. As Australia, transitions out of lockdown, pent up buyer demand and record low interest rates are combining to make residential property particularly attractive.
Buyer search volumes hit historic highs over the last few weeks in New South Wales, Victoria, Queensland and Australian Capital Territory. While Victoria has seen a 32.9 per cent increase since lockdown measures are beginning to be wound back. Compared to this time last year, buyer searches have been 39.2 per cent higher, according to realestate.com.au.
Sort out Suburbs
Will Farrell, Property Research Analyst at Ripehouse Advisory, feels that confidence in housing in Australia has now reached a turning point and will lead to strong demand going forward.
“It seems we've reached an inflection point in the public's sentiment towards property values. Property analysts are increasingly upbeat about the future outlook of the market; the RBA is assuring lenders that rates won't be increasing for the next 3 years and the public's notional interest is returning.”
According to Mr Farrell the majority of searches are still happening for suburbs close to metro areas, despite increasing interest in regional areas.
“The most searched established suburbs are all close to their state’s respective capital cities. Hahndorf is an increasing exception – being outside of Adelaide.”
Most searched established suburb - Source: Ripehouse Advisory
Mr Farrell says that the suburbs that saw the largest increase in search volumes were popular coastal locations, however, there were some outliers.
Search increases since last month - Source: Ripehouse Advisory
“I wasn’t particularly surprised to see Bendigo’s Quarry Hill, the Sunshine Coast’s Dicky Beach or Prospect in Launceston, Tasmania. These are all locations that would appeal to the sea and tree changers discussed by leading demographist, Bernard Salt.”
“Guildford in outer Perth and Malvern just to the south of Adelaide’s CBD are a bit more of a surprise but I should note the absolute increase in both of these suburbs is small.”
Transactions Set to Spike
Leah Calnan, President of the REIV, believes the surge in interest is due in part to pent up demand while stock levels remain incredibly tight.
“On the ground, we are continually seeing large numbers of buyers and a continual shortage of stock.”
“That stock shortage is becoming more of a challenge.”
Leah Calnan believes that we could see the Spring selling season play out over Christmas.
“We were late in getting the Spring selling season this year and normally we see 36,000 transactions through that period.”
“As a result, we will likely now see those auction campaigns go right up until Christmas and that will mean the January break won’t look like it did in the past. I suspect agents will return early and campaigns will recommence.”
Another reason for the strong interest in property is due to the fact that property prices have remained resilient says Leah Calnan.
“We’ll probably see a small reduction in transaction levels, but to see the median house price in Melbourne only come back by less than 5% and regional markets actually increase in value, that’s a fantastic result.”
“This shows that property in Victoria continues to be resilient.”
Investor Interest Returning
Mike Mortlock, Managing Director of MCG Quantity Surveyors feels that there will be strong demand headed into Christmas thanks to the lack of transactions we’ve seen so far this year.
“I think we’ll see a little bit of spike going forward because of the pent up demand. I don’t anticipate the traditional transaction season will be turned upside down.”
“I do think we’ll see a lot of people trying to get things done in the lead up to Christmas which is always a big psychological one. But we are slowly running out of time.”
Mr Mortlock believes that as people get more clarity around COVID, confidence is returning.
“A big chunk of demand has come simply because everything had ground to a halt. At least now, there’s a lot more certainty about their futures. There was a point in time, where we really didn’t know what the end case would be.”
“Also being locked in our houses has certainly given us plenty of time to reflect on where we live and people have been looking to take advantage of low interest rates to upgrade.”
On the ground, Mr Mortlock is seeing increased interest from investors looking to get back into the market.
“For our business, we track things like investor lending and transaction volumes and we were pleased to see three months of consecutive growth in investor lending. That points to the fact that investors are getting geared up to purchase investment properties.”
“While transaction volumes have been low, mortgage brokers and buyers agents who are at the front-end of the transaction, are saying that things are getting pretty busy. So I expect that will flow through pretty soon.”