It’s boom time for some states, but buyers will need to look harder for opportunities in those hit by COVID-19.
Champagne toasts – or COVID-19 oaths – are heralding this year’s spring property sales season, depending on whether a postcode is open for business or under strict lockdown controls.
“We’re already drinking French champagne to celebrate spring because we know it is going to be amazing,” says Barbara Wolveridge, a director of Sotheby’s International based in COVID-19 free Port Douglas in far north Queensland.
Beachfront houses are selling for around $8.5 million – if you can find one to buy – and four-bedroom/four-bathroom apartments with mountain views start from $2.7 million.
But in Melbourne, would-be buyers and sellers are frustrated. Inspections and auctions can only be conducted remotely, and companies that breach the rules face fines of more than $109,000.
Emma Bloom, a buyers’ agent with Morrell and Koren, which specialises in top-end property around inner Melbourne, says: “We are really behind the eight-ball because of COVID-19.”
Bloom adds: “We have clients queuing at the door. They are like bulls at a gate. They are ready to charge. They are being held back by the pandemic.”
And sellers concerned about not having a traditional four-week campaign are withholding their properties, contributing to an expected fall in new Melbourne listings of around 80 per cent in the month leading up to September 6, according to analysis by CoreLogic. Dozens are withdrawing properties listed for sale.
Selling at discounts
That isn’t the case for all properties, however. Phoebe Blamey, director of Melbourne-based Clover Financial Solutions, a mortgage broker, says a sharp fall in overseas students studying in Australia is creating opportunities for apartment investors.
“Student accommodation is selling at a discount because some owners are struggling to keep investment properties without tenants,” Blamey says about privately owned student apartments around Melbourne’s inner-suburban Caulfield and Hawthorn.
“Existing owners would prefer to sell their investment properties before their holiday homes,” she says.
Sydney sales volumes are being slowed by inspections being allowed only by private appointment for one person at a time, or by online, or virtual tours.
Patrick Bright, a Sydney-based buyers’ agent, says the number of clients has halved. Bright adds: “There is a mood of uncertainty. Transactions are slower and volumes lower. Buyers are being put off by the lack of choice.”
Vanessa Spencer’s attempts to buy an inner-Sydney investment apartment are being frustrated by a shortage of properties on offer and selling prices more than 30 per cent over the asking price.
“It’s really tough,” Spencer, head of creative for a retail chain, says about her search for a one-bedroom apartment with a car park selling for around $1 million. Cashed-up downsizers and younger buyers helped by their parents are snapping up limited supply.
Spencer says a one-bedroom apartment in Bondi without a car park being advertised for $1 million sold for $1.35 million. Another one-bedroom in Randwick advertised for $850,000 sold for $1.25 million. “It’s clear buyers are stretching themselves to buy what’s available,” she says.
In Melbourne, Clare Rylands bought a house in Mount Eliza, a bayside suburb around 63 kilometres south-west of the central business district, without an inspection for around $1 million.
“There has been a drought of new properties coming on to the market in this area,” says Rylands about buying the property sight-unseen after searching around the area since June.
Last weekend, sellers rescheduled around 10 per cent of planned Melbourne auctions and the clearance rate fell to 49 per cent. That compares to a clearance rate of more than 80 per cent in Sydney.
CoreLogic’s Eliza Owen, Australia head of research attributes the “remarkably different” clearance rates to Melbourne’s ban on physical property inspections. “It tells the story about how important it is for prospective buyers to be able to physically inspect a property to make such a high commitment as buying a home,” she says.
Cate Bakos, a Melbourne-based buyers’ agent, expects the sales season to be pushed back closer to Christmas and then continue into January, traditionally a holiday period for the industry.
“That’s what happened last year,” says Bakos, adding property sellers will want between two and four weeks to market their properties after lockdowns are lifted to ensure the best price.
“The relative stability of the economy and housing market through COVID-19 has meant that housing purchasing decisions were more likely to have just been postponed through lockdowns, rather than abandoned altogether,” Owen says.
In Brisbane, Robert Taylor, managing director of Statewide Conveyancing, a property law firm, says demand and price rises tipped to top 20 per cent for the year are the strongest he has seen in 30 years.
“There’s no lockdown, so business is normal,” Taylor says.
Demand is driven by owner-occupiers, cashed-up expats and a resurgence of demand in Mackay, 950km north of Brisbane, plus continued strong interest in coastal towns and havens.
There is no lockdown in Perth and markets are gearing up for spring sales. “There’s no lack of buyers and sellers will come on the market early in September,” says Karen Firth, sales executive at Bourkes Property.
This article is from Australian Financial Review, please click the following link for the original article: https://www.afr.com/property/residential/two-speed-spring-selling-season-looms-20210825-p58lqz