We are in an almost conveyancing boom. It is ‘almost’ because of one main factor: the lack of supply of properties on the market for sale.
Almost every other factor is propelling the property market upwards. Included in those factors is a worldwide pandemic. Buyers and sellers who postponed their purchases and sales in 2020 are letting loose in 2021.
According to CoreLogic research, dwelling values are rising at the fastest rate in 17 years including a 2.1% increase in values nationally over the month of February 2021. This was the highest monthly increase since August 2003.
CoreLogic describes the situation with housing values as ‘a broad based boom’. Low interest rates, government economic stimulus, structural changes in the importance of housing (e.g. WFH), consumer confidence are driving up prices.
Nationally, the number of advertised properties for sale is 25.3% below the level in 2020. With prices moving up sharply, it will encourage more sellers to enter the market, enabling an even greater number of sales.
Sales volumes are 35.3% up on 2020 levels. Compared to 2020, it is a conveyancing boom but 2020 was not a regular year.
In this ‘almost’ a conveyancing boom environment, we are only one step away from a genuine boom but also one step away from a bust. Conveyancing activity will gain momentum the longer prices keep rising, or at least not fall.
As is usual, the organisation that can put the brakes on this happy situation for vendors and the property industry is the RBA. The RBA will slam on the brakes if inflation measures across the economy start to rise. On the other hand, interest rates are so low that even a few adjustments up may not be enough to curtail the positive trend in the number of property sales.