Coronavirus: Uncertainty rules as house sales recoil

More than half the homes taken to auction since April failed to sell under the hammer.

Undeterred by lockdown: Kuan Zhou and daughter Evelyn outside their home at Brunswick, in inner-city Melbourne. Daniel Pockett

More than half the homes taken to auction since April failed to sell under the hammer in a market forced to adapt quickly to nationwide coronavirus restrictions.

The national capital city clearance rate fell to 47.9 per cent over the quarter from April to June, ­according to property researcher CoreLogic.

Falls reflected the strict six-week lockdown of the property market put in place at the end of March, which banned open homes and public auctions to slow the spread of COVID-19.

Uncertainty caused many nervous sellers to hold off or withdraw their homes from the market, with the number of auctioned properties falling 27 per cent in the past three months.

CoreLogic head of research Eliza Owen said the fall was felt across the whole property market.

“The initial market response to COVID-19 was a severe drop in sales and listings across both ­auction and private treaty sales methods. Many vendors who did not have to sell were initially unwilling to take their property to market in a time of high uncertainty,” she said.

“This contributed to a fall in sales volumes of 32.4 per cent over April. However, following this initial shock, transaction activity has steadily recovered as social distancing measures eased, and consumer confidence levels experienced a strong recovery in May and June.”

It was a stark turnaround from the first quarter of the year, which saw the end of the fastest recovery on record and the auction clearance rate in Sydney and Melbourne hover around 65 per cent.

Current lockdown uncertainty in the country’s two largest auction markets has dashed the hopes of a spring selling revival as consumer confidence continues to fall. The ANZ-Roy Morgan Australian Consumer Confidence Survey released on Tuesday showed sentiment had fallen for the third consecutive week.

My Housing Market chief economist Andrew Wilson said this would hurt over the coming months as now was the crunch time for sellers to decide to list their home in spring.

“There was optimism in the spring market taking off in the outer and middle suburbs. I think those plans have obviously been put on hold,” Dr Wilson said.

Not all sellers have been deterred. Kuan Zhou and Josh Will­iams, aged 32 and 30, committed to selling their Brunswick townhouse in inner-city Melbourne two hours before the citywide lockdown was announced.

Despite initial worry, the couple now feel confident their home can sell by online auction before restrictions lift in August.

“We did lots of research. I know it is not the best time to buy but there are still people out there with secure employment,” Ms Zhou said.

“We are also buying ourselves. In the first lockdown, we did a virtual tour and found it worked quite well — it was pretty much the real experience.”