Record demand drives “unseasonably strong” market activity: new report

Properties are selling faster and sales activity is much stronger this year compared to 2020 on the back of unprecedented buyer demand, a new realestate.com.au analysis shows.

The inaugural REA Insights Housing Market Indicators Report, released Thursday, showed sales volumes have jumped by a third so far this year. 

Realestate.com.au director of economic research Cameron Kusher said the unprecedented buyer demand and low supply levels have driven unseasonably strong transaction activity.

Property transaction volumes nationally were 41% higher last week compared to the same week in 2020, which Mr Kusher said indicated that transaction activity has returned much earlier and stronger this year than last.

“With borrowing costs at historic lows, we would expect that transaction activity will remain strong over the coming weeks,” Mr Kusher said.

“The biggest challenge for the market remains the low volume of stock available for sale. However, new supply does seem to be increasing over recent weeks.”

Scarborough

The low volume of stock for sale remains the biggest challenge for the housing market. Picture: Getty

The report showed sales volumes jumped by 33.2% over the first 11 weeks of 2021 compared to the same period last year.

Low supply levels and unprecedented demand have led to the surge in home sales and properties selling quickly, pointing to a strong autumn selling season.

The average number of days property listings spend on realestate.com.au has been trending lower since July, after initially rising as a result of coronavirus lockdowns from March last year.

Mr Kusher said the typical property spent 48 days on site before being sold. 

That count, taken at the end of February, compared to a peak of 71 days in June 2020 and 52 days in February last year.

The REA Insights report showed the volume of visitors searching for properties for sale on realestate.com.au had increased by 57.8% compared to a year ago.

The average number of views per listing on realestate.com.au hit a record high in February 2021, rising by 73.9% compared to February 2020, the month before coronavirus restrictions and lockdowns began across Australia. 

“Buyer demand is likely to remain elevated given the unprecedented levels of search activity we are seeing, but we do expect that views per listing on realestate.com.au will moderate over the coming months as more stock becomes available and properties are listed for sale,” Mr Kusher said.

A shift in preferences towards houses and away from apartments as people seek more space during the pandemic is evident in the data, with houses dominating email enquiries to residential agents.

Malvern house

There is an unprecedented level of buyer demand and houses are the most popular property type with home seekers. Picture: realestate.com.au/buy

Enquiries for houses increased by 79.7% in February 2021 relative to a year earlier, compared to a 51.5% increase in enquiry for units and 90.3% for vacant land.

“In mid-2020 there was a surge in enquiry for vacant land as HomeBuilder was announced, and that has continued throughout the year with vacant land enquiries recording the largest year-on-year increase despite it seeing a small overall share of total enquiry,” Mr Kusher said.

Buyers have been scrambling to secure new land releases before HomeBuilder ends on 31 March.

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