Properties are flying off the market at record speeds

author-avatar By on April 09, 2021
Properties are flying off the market at record speeds

Australia's property market boom shows no signs of slowing with buyer interest surging, even heading into the traditionally slower winter months.

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.


Buying a home or looking to refinance? The table below features home loans with some of the lowest 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 27, 2021. View disclaimer.


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 firsthome 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.

Screen Shot 2021-04-09 at 11.04.47 am

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


John Lockwood on Unsplash

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.

*The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.

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author-avatar
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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