Property listings plunge heading into spring selling season

author-avatar By on August 27, 2020
Property listings plunge heading into spring selling season

Photo by Tom Rumble on Unsplash

The number of new properties listed for sale has dropped 9.6% nationally as the country gears up for an unusual spring selling season.

Typically, spring selling season is the busiest time of year for the real estate market but new research suggests this year could be very different as a result of the COVID-19 pandemic. 

New CoreLogic data shows that in the four years before the pandemic, the number of new properties listed for sale nationally has, on average, increased by 6.3% between late July and August. 

But this year, the same period has seen a 9.6% decrease in new listings nationally. 

This was driven by Melbourne, where a 54.9% plunge in property listings in the month to August 23rd accounted for over 100% of the national decline. 

"As Melbourne reached the halfway mark of its Stage 4 restrictions in late August, national listings activity has completely diverged from the usual listings patterns in the lead up to spring," CoreLogic Head of Research Australia Eliza Owen said. 

Buying a home or looking to refinance? The table below features home loans with some of the lowest variable interest rates on the market for owner-occupiers.

Lender
Advertised rate Comparison rate Monthly repayment Rate TypeOffsetRedrawOngoing FeeUpfront FeesLVRLump Sum RepaymentAdditional RepaymentsPre-approval
VariableMore details
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
VariableMore details
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
VariableMore details
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • Refinance only. Fast online application
  • No Nano fees. Free 100% offset sub account
  • Mobile app, Visa debit card & instant payments
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • Refinance only. Fast online application
  • No Nano fees. Free 100% offset sub account
  • Mobile app, Visa debit card & instant payments
VariableMore details
YOU COULD WIN $100k TO PAY DOWN YOUR LOAN*

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • For a chance to win $100K towards your home loan, apply with Athena before Oct 31 & be approved by Dec 15
  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
YOU COULD WIN $100k TO PAY DOWN YOUR LOAN*

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • For a chance to win $100K towards your home loan, apply with Athena before Oct 31 & be approved by Dec 15
  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
VariableMore details
AN EASY ONLINE APPLICATION

Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)

  • Unlimited additional repayments
  • Unlimited free redraws
  • Optional 100% offset can be added for $120 p.a.^
AN EASY ONLINE APPLICATION

Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)

  • Unlimited additional repayments
  • Unlimited free redraws
  • Optional 100% offset can be added for $120 p.a.^

Rates correct as of October 17, 2021. View disclaimer.

Conversely, most other capital cities - with the exception of Sydney - saw an increase in new listings as lower levels of COVID-19 cases in other parts of the country saw greater levels of consumer confidence.

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Ms Owen said the pandemic has had a greater effect on market activity than property prices. 

"A key takeaway from CoreLogic data amid the pandemic, is that transaction activity slows significantly in response to COVID-19 restrictions," Ms Owen said.

"The resulting loss of employment, lower consumer sentiment and border closures have had a much larger impact on the number of properties marketed and sold, than property prices themselves."

This can be seen from the Stage 2 restrictions implemented in late March, when new property listings plunged 50.3% from mid-March to early May.

"This exacerbated the seasonal dip in for sale listings throughout March and April."

Screen Shot 2020-08-27 at 10.29.10 am

Ms Owen said there are two reasons why property transactions have slowed during COVID-19. The first is the obvious physical limitation of buying and selling property when strict social distancing measures are in place. 

The second is the economic uncertainty generated by strict lockdown measures.

"The drop in sales volumes in times of high economic uncertainty, such as around the GFC and the national Stage 2 restrictions in March and April, indicates sellers and buyers are less likely to participate in property transactions during negative economic shocks or periods of heightened uncertainty," Ms Owen said.

Additionally, mortgage repayment deferral offerings from the banks have kept a tight lid on new listings.

"This has meant that people who cannot currently service their mortgage do not have to list as a distressed or motivated seller," Ms Owen said.

"This dynamic may change in the lead up to March, when banks may need to end repayment deferrals.

"Property owners who have deferred their mortgages, but are not in a position to reinstate their repayments by the end of March, may decide to offload their property in the lead up to this expiry date."

Ms Owen said we could expect to see a larger number of distressed listings come on the market.

Property industry should "brace for a subdued selling season"

Ms Owen said although the number of property listings on the market recovered quickly after the initial COVID restrictions in March and April, this time will be different.

"Once restrictions are repealed in Melbourne this time around, the recovery in transaction activity is likely to be weaker," Ms Owen said.

"That is because employment is taking another hit, consumer sentiment is dampened by the reality of a second outbreak of the virus, and a reduction in fiscal support is only a month away.

"Ultimately, the second round of restrictions across Victoria is likely to create a weaker ‘spring selling season’ than in previous years."


Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:

  • The big four banks are: ANZ, CBA, NAB and Westpac
  • The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2020. They are (in descending order): Great Southern Bank, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
  • The larger non-bank lenders are those who (in 2020) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.
  • If you click on a product link and you are referred to a Product or Service Provider’s web page, it is highly likely that a commercial relationship exists between that Product or Service Provider and Savings.com.au

Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site.

In the interests of full disclosure, Savings.com.au, Performance Drive and Loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.

*Comparison rate is based on a loan of $150,000 over a term of 25 years. Please note the comparison rate only applies to the examples given. Different loan amounts and terms will result in different comparison rates. Costs such as redraw fees and costs savings, such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.

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Emma Duffy is Assistant Editor at Your Mortgage and  Your Investment Property Mag, which are part of the Savings Media Group. In this role, she manages a team of journalists and expert contributors committed to keeping readers informed about the latest home loan and finance news and trends, as well as providing in-depth property guides. She is also a finance journalist at Savings.com.au which she joined shortly after its launch in early 2019. Emma has a Bachelor in Journalism and has been published in several other publications and been featured on radio.

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