Covid-19 lockdown stress pours cold water on red hot housing markets

Sydney’s housing market shows signs of lockdown stress as normal property operations are halted in three capitals.

Callum Richardson (L) & Richard Bonnar, who have listed their Marrickville unit this week. John Feder/The Australian.

Sydney’s housing market is showing signs of lockdown stress as normal property industry operations are halted in three capital ­cities because of restrictions.

The number of new properties advertised last month in locked-down Sydney fell by 13.3 per cent, according to new data from Realestate.com.au.

New listings fell in five out of the eight capital cities through June, with Melbourne down 11.1 per cent ahead of its lockdown declaration earlier this month. Total listings in the country’s two largest markets were also down.

REA Group executive manager of economic research Cameron Kusher said the fall in listings highlights the overall shortage of properties for sale, with insufficient new listings being added to meet market demand.

“Last month’s double-digit percentage fall in new listings for sale in Sydney and Melbourne can be partially attributed to Covid-19 lockdowns,” Mr Kusher said.

“While activity in Melbourne has since rebounded, Sydney remains in lockdown and market ­activity has subsided further.”

Data from My Housing Market suggests this trend of fewer new listings through Sydney and Melbourne has continued through July.

Inner-city Sydney couple Richard Bonnar and Callum Richardson decided to list their Marrickville apartment after discussions with local Ray White agent Bianca Field. It was a decision between taking advantage of the strong market conditions and waiting until after lockdown, with the surety of current prices winning them over.

“The market really is red hot at the moment and we‘ve had a lot of trouble with this property in terms of its value fluctuating in the past,” Mr Bonnar said.

“The fact that the prices are on such an upward trajectory, I think a lot of buyers are really spooked and feel like they have to get in now.”

Lockdowns prohibit real estate agents in each of the three virus-restricted capitals – Sydney, Melbourne and Adelaide – from hosting open homes and in-­person auctions. An eviction moratorium is also in place in ­Sydney to protect rental tenants.

While the Sydney figures could be partially explained away by traditionally quieter market conditions through the winter months, SQM Research managing director Louis Christopher said the swift reduction in auction numbers over the past few weeks is a clear sign of Covid impact.

In the past few months and through the first few weeks of lockdown, Sydney held an average of 700 to 900 auctions a week.

Last week, just one-third of the 1073 homes originally slated to be placed under the hammer went ahead.

Only 540 property auctions are scheduled for this week.

“What we will find getting into week five, six, seven of lockdown is auction numbers will fall away,” Mr Christopher said.

“The average auction campaign is four weeks. No vendor has the confidence to lock in a date with no sign of the lockdown ending. It will be the same again in Melbourne if restrictions go past three weeks.”

Mr Christopher expects under the hammer sales to push lower as many vendors get cold feet and decide to reschedule their auction, change to a private treaty or withdraw from the marketplace.

A CoreLogic report released on the impacts of lockdowns did note markets did quickly bounce back.