In the depths of this crisis on Saturday 28 March 2020, before the announcement of JobKeeper and State based assistance programs, 1,063 properties sold at auction in the capital cities of Australia(1). This is a great source of optimism for conveyancing in these unprecedented times.
In Sydney, on Saturday 4 April 2020, the clearance rate at 39% was comparable to the week before at 40.3% (2) – another positive sign.
A large number of properties were withdrawn from auction in the last two weeks. Were they withdrawn from sale altogether or from public auction only due to the health ban on such auctions? We will know soon.
Perhaps the most important statistic is that property sales volumes in 2019 were already low so we are not faced with an extra cyclical adjustment this year.
Across NSW, property transfers were down by 20% for the three month period, February to April 2019 compared to the equivalent period of 2018 (3). This means that last year – 2019 – sales volumes were already subdued. Most conveyancing businesses would have already adjusted to the lower level of activity from 2019.
How will property sales track for the remainder of this calendar year compared to last year?
The reasons to be optimistic:
- Boom sales levels had already been removed from activity this year before the crisis hit
- People sell property for life-cycle reasons rather than because of world events
- Property, as always, is considered to be a safe haven for investors compared to publicly listed shares
- Lowest interest rates ever
- Unprecedented government assistance packages
- Real estate agents, mortgage brokers and banks are proving to be adaptable in these times
However, the word ‘optimism’ is used in a terrible situation that no one wants.
(1) CoreLogic data
(2) Domain Sydney Auction Results
(3) Land Titles data