Restrictions take Spring for property market‘s step

Covid-19 restrictions are adding new obstacles in the way of the home buying process, with many resorting to purchasing site unseen.

Serg Duscas with Zara at home in Pakenham on Sunday. Picture: Luis Enrique Ascui

Covid-19 restrictions are knocking the wind out of real estate in some cities as the market enters its spring boom season. But buyers elsewhere are so desperate they are resorting to purchasing site unseen.

Lockdown restrictions in some of Australia’s largest and fastest-moving markets – NSW, Victoria and Canberra – have dampened the first auction weekend of the season. The number of properties for sale is at a low, while sellers are proving gun shy at auction. The industry has been forced to adapt over the past month to a total ban on property inspections in Melbourne and Canberra and one-on-ones in Sydney, implemented by health officials to slow the spread of the virus.

The number of homes taken to auction was down 20 to 39 per cent on the five-year average in the virus-impacted capital cities, according to property researcher CoreLogic, but the impact on preliminary clearance rates was ­varied.

More than half (54 per cent) of auctions scheduled last week were pulled without being rescheduled, leading to the preliminary clearance rate falling below 50 per cent (44.5 per cent) for the third week running. Once strong Canberra is having similar struggles. Thirty-six per cent of auctions in the national capital were withdrawn last week, weighing on the initial clearance rate (57 per cent).

Sydney was more resilience, reporting a clearance rate of 84 per cent from 609 auctions. Eleven per cent were withdrawn.

Heavy restrictions have weeded out rubbernecks from the market, leaving agents dealing with qualified buyers. Ray White’s ­Victorian and Tasmanian chief executive, Stephen Dullens, said after more than 100 days of such restrictions, Melbourne buyers were more comfortable with the virtual selling process, including auctions and inspections.

The state arm of the national business sold just shy of $800m worth of property in August ­despite only operating five days as normal, with more than 900 sales made.

“Hesitancy in online auction is almost gone,” Mr Dullens said. “People are happy to look online and there is a portion that is happy to buy but a majority will want to see it in person.”

One buyer is Melbourne construction worker Serg Duscas, 26, who is preparing to move into his new home in Pakenham, on the south eastern edge of the city. He has not stepped a foot inside, relying solely on video tours from his agent – Ray White’s Gavin Staindl – and building and pest ­inspections to make his decision.

“People tell me I’m crazy,” Mr Duscas said. “I missed out on more than 15 houses before this. Normally, I’d put more research into a car than I did for buying this house.”

CoreLogic’s Tim Lawless said “spring hasn’t quite sprung in the auction markets”, with the ­national preliminary clearance rate last week hitting 67.3 per cent.

“Clearly there is a big difference between the markets navigating a lockdown and those that are not, but even within cities grappling with the Delta outbreak, rules preventing physical property inspections are imposing a significant detrimental outcome,” Mr Lawless said.

Brisbane proved the strongest of the smaller markets last week, reporting a preliminary clearance rate of 78.8 per cent from 157 auctions, followed by Adelaide (75.7 per cent from 148 properties) and Perth (50 per cent from 16 properties).