Sydney’s lockdown will be challenge for home buyers due to fewer available properties

Lockdown could serve up another challenge for Sydney’s frustrated homebuyers by draining the supply of properties available while doing little to drag down prices.

Property sales from the weekend showed vendors continued to get strong results, with close to 76 per cent of scheduled auctions producing a sale, CoreLogic data showed.

The median price of houses sold at auction was nearly $1.6 million and the top sale came in at over $5 million.

For some perspective, Sydney’s auction clearance rate has historically been around the 65 per cent mark and was near 80 per cent in the weeks leading up to the lockdown.

But the strong recent results masked what appeared to be growing nervousness from sellers about the impact of restrictions on inspections and on-site auctions.

Housing experts said this trend was resulting in a drop in available properties at a time when buyer demand remained elevated.

There were originally going to be close to 800 auctions for the week but by the weekend that number had dropped to about 660 as more vendors postponed their sales to later weeks.

A further 108 properties were withdrawn from auction altogether, while 307 sold prior to auction.

Starr Partners chief executive Douglas Driscoll said a drop in listings because of homeowners delaying sales would hurt buyers as there would be fewer properties to choose from.

“There has yet to be any sign that the lockdown has stopped buyers and it’s hard to see why it would,” Mr Driscoll said.

“It is looking more like the lockdown will be a circuit breaker for the market, there will be less sales activity, but the market is not going to go backwards.”

Ray White chief economist Nerida Conisbee said the experience of Melbourne’s prolonged lockdown last year suggested serious buyers would not be deterred by Covid-19 restrictions.

The most notable impact during lockdown was a change in where Melbourne house hunters sought out property, she said.

“There was a strong trend for outer suburban and regional properties,” Ms Conisbee said, adding this was likely because of families wanting more space while being holed up during lockdown. director of economic research Cameron Kusher said sellers would likely react to lockdown more than buyers.

“(Lockdown) will impact sales activity and there will be fewer auctions,” he said. “But if you’re a serious buyer, you still have the ability to purchase.”

Source: Aiden Devine 12 Jul 2021

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