Home buyer demand at record high in August: REA

The REA Insights Housing Market Indicators Report for September 2021 has revealed that ahead of what is predicted to be a delayed spring selling season, the volume of email inquiry to real estate agents on realestate.com.au spiked by 12.2 per cent in August.

The report – which is compiled based on extracting property insights from visits to realestate.com.au each month by measuring key metrics including search activity, email inquiry, views per listing, weekly property sales, and days on site of properties sold – said that inquiry on the website for properties for sale hit a new record high for houses and units in August.

Each property type recorded a monthly increase in inquiry across houses (up 14.5 per cent), units (up 9.3 per cent), and land (up 6.4 per cent).

Houses remained the most popular type of inquired property (61.9 per cent), followed by units (29.1 per cent). However, the share of land inquiry reached the lowest point since November 2020 (9.0 per cent), while developer inquiry reached a historic high, lifting by 6.0 per cent in August.

REA Group director economic research and report author, Cameron Kusher commented that “with people in a number of states unable to attend open homes, it’s unsurprising to see a jump in email enquiries”.

The volume of inquiry from buyers (typically owner-occupiers) fell by 21.6 per cent in August, the largest monthly fall since December 2019.

However, interest from first home buyers peaked with substantial monthly increases in inquiry (up 31.5 per cent) and investors (up 17.1 per cent).

Buyer inquiry reached a historic low, comprising 39.2 per cent of all inquiries compared to 35.9 per cent from FHBs and 24.9 per cent from investors (both of which were historic highs).

National search activity on realestate.com.au for properties for sale increased during the week of 30 August to be 17.6 per cent higher year-on-year, despite prolonged lockdowns across Australia.

Mr Kusher has predicted strong volumes of search activity over the coming months as lockdowns continue in NSW, Victoria, and the ACT.

Demand based on views per property listing on the website reached a historic high in August to be 46.7 per cent higher year-on-year even as the volume of stock for sale has continued to shrink.

“The ongoing reduction in the volume of stock available for sale coupled with elevated search volumes resulted in record high interest from buyers in August,” Mr Kusher said.

“This indicates a continuing disconnect between the supply of stock for sale and buyer demand, which could continue to create upwards price pressures.”

Weekly sales results to date in 2021 are 50.7 per cent higher compared to the same period last year, and 63.9 per cent higher than the corresponding period in 2019, but are well below their peak in April this year.

However, states and territories in lengthy lockdowns have begun to see sales volumes trend lower over recent months.

Mr Kusher said: “This is a trend we expect to continue. Victoria is likely to see a steeper fall in sales given that one-on-one inspections are currently banned in the state.

“If new listings continue to rise elsewhere, and those states and territories remain out of lockdown, it’s reasonable to expect a lift in sales in those areas over the coming weeks.”

Of properties sold in August, the median days on-site rose to 41 days from 39 days in July, marking the longest time on-site since February 2021.

The REA Insights report said that with limited new listings coming to market, this could be due to older stock that may have been for sale for a longer period of time now being bought, resulting in the overall days on-site metric rising.

Observing the trend of high demand and low supply that has been at play, Mr Kusher said: “It is likely pent-up supply and demand will be released once lockdowns ease and the typical increase in new listings that comes with spring could help provide buyers with more choice and reduce some of the competition for individual properties.”

[Related: Sydney lockdown puts brakes on new listings]