Pent-up demand from vendors hoping to sell their properties during the traditionally busy spring selling season has revived the Melbourne property market.
After months of sitting on their hands as stage four restrictions barred in-person activity, vendors have listed their properties en masse in response to the reintroduction of private inspections and outdoor auctions.
Property analytics firm CoreLogic found the total number of properties for sale in Melbourne increased from 1606 to 6974 over the four weeks ending ending October 18.
That represents a 334 per cent jump in the number of homes and units on the market compared to one month ago.
Although most mortgage deferrals are expected to end in October, CoreLogic head of research Eliza Owen said the uptick was more likely to be the first sign of a rebound than a wave of distressed sales.
Not least because “CoreLogic data does not point to a significant increase in mortgagee in possession events across Victoria,” Ms Owen wrote in a note.
“After months of restrictions, pent-up demand from sellers has accumulated so much that more stock was recently added for sale in Melbourne than any other capital city region.
“High buyer demand can also mitigate risk for distressed sales, because the added demand pushes up prices.”
Only the Macedon Ranges saw a decline in the number of available listings.
And the highest increases occurred in Wyndham (314), Melbourne City (273) and Whittlesea-Wallan (256).
Castran Gilbert director Michael Lang told The New Daily the backlog of properties was being met by an increase in interest among buyers hoping to get bang for their buck in the early weeks after lockdown.
“Properties are selling at a fair value compared to when you’re in a bullish market, where you’re usually competing against three to six people, which pushes prices that extra 10 per cent,” Mr Lang said.
But it’s not the cheaper end of the market that has driven the surge of available homes.
Mr Lang said it’s homes that command $2 million to $4 million price tags.
“It’s a sector that’s felt a greater impact because these home owners are employers and business owners, so it may be a result of the effects of COVID and they’re also the ones who have got kids at private school and whatnot, so they need to access that equity,” he said.
“Looking at that, areas that are affected the most are the inner east – so Boroondara, and a bit in Stonnington – compared to first-home buyer magnets in newer suburbs and land subdivision-type stock.”
But the more expensive homes may take a while to sell.
Because Melbourne’s bounce back is being led by first-home buyers, according to Wakelin Property Advisory director Jarrod McCabe.
But as the city readies for what would traditionally be one of the busiest Saturdays of the year, Mr McCabe said those looking to buy have “no need to rush”.
“The sub-45 age bracket, who perhaps don’t have the same degree of concern about the virus or were not impacted as much financially or employment-wise, seem to still be quite active in the marketplace.” Mr McCabe said.
“There’s a reasonable amount of buyer activity in that sub-$1.5 million mark, particularly in inner-city suburbs.”
Mr McCabe said more houses would come onto the market every week until Christmas – marking a stark contrast from previous selling years, when activity usually drops off around the last week of October.
But there’s unlikely to be “drastic” movement in prices, he said.
“Probably after the first quarter next year, I think that’s where we’ll start to see some changes, but whether that’s positive or negative will depend on how we respond to dissipated government support.”