The real estate market typically slows down in winter, but there's no sign of that happening this year.
REA Group Insights Housing Market Report, released today, found that properties are selling at record speeds, with the average time on market reaching 48 days in March 2021, down from 71 in June 2020.
Properties are selling the fastest in the Australian Capital Territory (25 days), New South Wales (27 days) and Victoria (30 days) over March 2021.
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Australia's property market has been booming due to a 'perfect storm' of historic low mortgage interest rates, a stronger than expected economic recovery, and strong buyer demand.
Anne Flaherty, realestate.com.au economist and author of the report said Australia’s property market shows no signs of slowing in 2021.
"The low cost of debt combined with an unprecedented level of government support has seen buyer activity surge this year," she said.
More eyeballs on property listings
The report, which analysed house hunting behaviours by 12 million Australians in real-time, also found that buyer demand is continuing to surge, with views per listing more than doubling since the start of COVID.
Nationally, views per listing increased 6.1% in March and 106.8% since the same time last year.
In fact, every state hit record high numbers of average views per listing in March 2021.
"This growth can be attributed to several factors, including record low borrowing costs, government support packages for first–home buyers and limited available stock," Ms Flaherty said.
State by state, Queensland saw sky high demand for property with views per listing surging 127.4% since March last year, followed by New South Wales (116.1%) and Western Australia (109.5%).
DiJones Head Auctioneer Josh Larsen said there have been record numbers of house hunters looking to relocate attending auctions.
“There is strong interest from Sydney buyers to regional areas with a recent open house on the central coast seeing 124 out of 126 people who attended looking at relocating from Sydney.”
See also: Melbourne and Sydney auctions see skyrocketing prices and high clearance rates
More expensive homes wanted
The report also found that buyers are searching for more expensive properties compared to a year ago.
Between March 2020 and March 2021 there was a significant drop in searches to buy sub-$500,000 properties in both regional areas and capital cities, while the $500,000 to $750,000 category remains the most popular price filter.
Properties in the $1 million to $1.5 million range saw the largest growth in capital cities and regional areas.
"Buyers looking to purchase in regional areas are searching for more affordable properties," Ms Flaherty said.
"The low cost of debt and subsequent price rises have driven an increase in searches for properties in the $1 million-plus range which accounted for 42.3% of the share of searches over the past 12 months, up from 36.2% in the year prior."
Buyer preferences change post-pandemic
Improved borrowing power, government incentives like HomeBuilder, and remote working arrangements have seen house hunters searching for more space, with enquiries for houses and land surging while demand for apartments has eased.
Houses accounted for 63.5% of email enquiries sent to real estate agents in March 2021, while apartments were just over a quarter (26.2%).
"After peaking in June 2020 with the launch of the HomeBuilder package, the proportion of email enquiries for land declined over the second half of the year," Ms Flaherty said.
The government has been facing renewed calls for HomeBuilder to be extended off the back of a construction frenzy.
Recent Australian Bureau of Statistics (ABS) data showed construction approvals for houses surged 15% in February to its highest level on record, and was up by more than 57% since the start of COVID.
Lending for home renovations also rose to its highest level since 2009 while the number of construction loans in the three months to February 2021 was 43% higher than the previous quarter.
The report found the new homes section of realestate.com.au saw enquiries for land estates surge by 262.7% over the 12 months to March 2021.
"The launch of the HomeBuilder grant in June 2020 drove a significant shift in the share of enquiries between apartments projects and land estates," Ms Flaherty said.
First home buyers beginning to drop off
Although first home buyer activity peaked in 2020, the tables are beginning to turn as house prices soar.
Investors are steadily returning to the market, accounting for 16.9% of email enquiries over March, which is above the 11% share recorded during June 2020.
Meanwhile, enquiries from first home buyers has been dwindling, down to 22.1% in March.
"(First home buyer enquiries) are expected to continue trending downwards over the remainder of the year, due to rising prices and the winding back of government support packages such as HomeBuilder and the First Home Loan Deposit Scheme," Ms Flaherty said.
In February, ABS data showed loan approvals for first home buyers fell for the first time since May 2020, having last month reached a 12-year peak.
Archistar chief economist Dr Andrew Wilson said it's getting harder for first home buyers to realise the Great Australian Dream of home ownership.
"With home prices now rising sharply in booming housing markets and government policy initiatives expired or diminishing, the likelihood of continuing strong first home buyer activity is quickly declining," he said.
See also: Australia's property market boom: 'Sobering' decisions facing first time buyers
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