Increased buyer demand: Weekly market wrap with Sam DodimeadBack
In January 2021, stock levels tightened significantly, increasing pressure for buyers to act decisively. According to SQM Research, in January the total number of listings in Canberra was 3,252, down from 3,617 in January 2020 and 4,122 in January 2019.
A combination of historically low interest rates and improved access to credit have caused positive market sentiment leading to increased buyer demand across all price points. With 21.1% fewer properties to choose from, its easy to see why CoreLogic reported values of houses increased by 1.3% and units by 1.0% during January 2021.
Year-on-year, lower listing numbers were reported across all days on market except 30-60 days. This signifies ambitious vendors remain comfortable letting their property pass in at auction as they’re confident values will increase to meet their price expectations and achieve a sale under private treaty conditions shortly thereafter. By Saturday afternoon, real estate agents’ social media pages show most vendors are achieving a sale either prior to auction or under the hammer, with many achieving sale prices well over reserve.
Those interested in property data, and in particular auction results, had up until recently been able to rely on property portals to release accurate information. Results from Saturday 6 February saw Domain report a preliminary clearance rate of 76% from 37 scheduled auctions and 21 reported results, CoreLogic report a preliminary clearance rate of 92.7% from 59 scheduled auctions and 41 confirmed results. Seeing a large disparity in the clearance rate when one source had a greater pool of results to reference can be explained by some agencies choosing to withhold their auction results from a competitor to their business interests in the property portal space.
Time is running out for buyers seeking new properties wanting to qualify for the $15,000 HomeBuilder Grant. Whilst in theory contracts can exchange on or before 31 March 2021, buyers often don’t allow for the time it takes to have a contract sent to their solicitor, reviewed by their solicitor, receive advice and exchange. Throughout December 2020, the enormous number of off-plan purchases attempting to exchange by the deadline caused lengthy delays and exchange timeframes to increase.
Acting early allows buyers to move through the exchange process without fear of missing out on their $15,000 grant due to exceeding the exchange deadline.
Buyers who have taken a more relaxed approach to finding a property or have completed extensive market research, clinically assessing every available option, are finding values are rapidly shifting. One project I have extensive knowledge of has seen uplift in values exceeding $60,000 per dwelling in five months and has sold out of most plan types. It is remarkable that in August 2020, two-bedroom townhouses were selling for $499,900 and the last several sales have exchanged for more than $560,000.
Based on the strong demand in both the established and off-plan markets, buyers who are choosing to sit on the sidelines are potentially costing themselves thousands, if not tens of thousands of dollars.
With Sam Dodimead, local property professional and host of Canberra Property Podcast where you can get to know the consultants contributing toward deliver of new buildings. Stream from wherever you listen to podcasts.
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