Coronavirus: Eased property restrictions welcomed but recovery may be slow

Easing of restrictions on auctions and inspections welcomed, but experts warn it may be a long wait for normality to return.

Auctioneer David Cortous at work in Newtown, inner-western Sydney, in March before the property industry was hit with coronavirus restrictions. Picture: Glenn Ferguson

The decision to lift restrictions on public auctions and open homes in NSW has been welcomed by the property industry, but experts warn it may be a long wait for normality to return.

Sellers in the country’s largest property market will join the Northern Territory next weekend in having the option to hold traditional public auctions and open homes for inspection.

Last weekend, Western Australia eased the rules to allow open homes of up to six people, the first moves to reopen the property industry after six weeks of restrictions.

The restart comes as property researcher CoreLogic reported the strongest preliminary auction clearance rate since the bans were put in place.

Almost 60 per cent of the 590 properties put on the auction block nationally last week sold on the back of lower withdrawal numbers — sellers would have made the decision to list while the lockdown restrictions were in place.

CoreLogic auction commentator Kevin Brogan said the unexpected decision will not return the industry to normal immediately. Given the average four week lead time of an auction campaign, the number of properties on offer will remain low for at least a month.

“There will be, I would hope and expect, strict social distancing requirements,” Mr Brogan said.

“The other thing is, of course, the number of properties listed for next weekend will be significantly lower than normal because, at the time of listing, there was probably no expectation that we were going to see the restrictions lifted at this stage.”

Online auctions became common during the lockdown. Properties committed to auction in coming weeks have been preparing for the digital format. But Ray White Group managing director Dan White said he expected a new dual approach to become popular as agents look to broaden the buyer pool.

“The solution is to offer both (digital and live auctions) and to attract more buyers as possible,” Mr White said. “I think this is much more than a sentiment shift, it shows there is normality to the market that hasn’t been there for the last couple of months.

“It’s obviously a great sign of confidence and hopefully it will give more confidence to vendors that the market is operating on a more traditional basis.”

CoreLogic’s latest monthly house price index showed national house prices rose 0.3 per cent nationally through April, but momentum in the market has come off significantly. Sydney posted a 0.4 per cent gain, while Melbourne fell 0.3 per cent.

Real Estate Institute of Australia president Adrian Kelly said it was the right move for states to make the call on when the local real estate markets are allowed to operate.