Property sales volumes jump by 47.5%

REA Group’s PropTrack Housing Market Indicators Report for October has shown preliminary weekly sales volumes last week rose by 12 per cent, to reach the highest level in 13 weeks (6,972 sales).

Preliminary weekly sales volumes to date this year were recorded as 47.5 per cent higher than the same period in 2019, although they were still below their peak in April.

Despite more states being in lockdown, sales volumes last week were 32.1 per cent higher than over the same week last year.

They also appeared to have turned a corner in locked down states, climbing by 60 per cent last week in Victoria, with the return of private inspections, compared to 68 per cent in the ACT and 4 per cent in NSW.

PropTrack senior economist and report author Eleanor Creagh commented constrained supply combined with escalated demand has resulted in raised interest on realestate.com.au.

“It’s particularly promising for Australia’s largest markets, Sydney and Melbourne, where we are seeing big jumps in market activity as freedom for both cities is now well in sight,” Ms Creagh said.

“The momentum should continue in October as restrictions ease further and mortgage rates remain low.”

As there was limited stock on the market, views per listing on realestate.com.au hit highs.

After reaching a record level in March, demand based on average views per listing on realestate.com.au rose by a further 9.3 per cent in September. Views per listing were also up 59.2 per cent year-on-year.

Across states, views per listing had increased in all regions except for Western Australia (which was down 0.8 per cent) and the Northern Territory (down 0.4 per cent).

Locked down NSW had 16.8 per cent rise, while Victoria climbed by 9 per cent.

The median number of days a property listing sat on the website also slightly decreased, down to 39 days from 40 in August.

National search volumes for property on the platform rose by 18 per cent year-on-year, around 5 per cent lower than their record high in February.

PropTrack noted search volumes reached highs across Queensland, South Australia and the NT earlier in September, although they dipped slightly in recent weeks.

Buffer change tipped to cool demand for higher-priced housing

Searches for properties at or above $1 million made up 44 per cent of searches compared to 34 per cent a year earlier.

Throughout the capital cities in September, 43.1 per cent of searches were for properties listed between $500,000 and $1 million, compared to 48.2 per cent a year earlier.

Searches for properties below $500,000 reached a historic low in September at 12.7 per cent compared to 17.3 per cent in 2020.

“While lockdowns remain, restrictions are easing, vaccination thresholds are being met and roadmaps out of lockdown are drawing close,” the report stated.

“We would expect searches to remain elevated over the coming month, particularly if we see a rise in new listings.”

However, APRA’s new increased minimum interest rate buffers are expected to dampen the maximum amount some buyers will be able to borrow, which the report noted will likely take some of the steam out of ever-increasing demand for higher-priced property.

Houses remained the dominant type of property inquired about (62 per cent), followed by units (29.8 per cent) and then land (8.3 per cent).

There had been a slight fall in the number of searches for properties with at least three bedrooms in the past year, PropTrack reported, it retained the majority (48.6 per cent of searches).

Demand for space is expected to stay substantial due to the pandemic.

However, Ms Creagh noted the “runaway price growth” from this year is likely to ease, as the market faces new macroprudential headwinds.

APRA recently increased the serviceability buffer rate it expects banks to use to assess borrowers’ applications – to 3 percentage points above loan product rates (previously it was 2.5 percentage points).

“While these changes will only marginally impact borrowing capacity for now, [APRA] has left the door open to potential further tightening,” Ms Creagh said.

Email inquiries for property on the platform were 14.6 per cent higher in September compared to August, reaching a record high for REA.

PropTrack reported many potential buyers had been in locked down states and unable to attend open homes, leaving them more active online.

Investor inquiries in particular were 147.9 per cent higher year-on-year and the highest since PropTrack started recording at the beginning of 2019 – 7.3 per cent higher than the month before.

First home buyer inquiries were up by 9.7 per cent from the month before and 67.5 per cent higher year-on-year.

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