How Canberra’s COVID-19 lockdown is impacting the capital’s property market

 In Home News Section, Uncategorized

Cracking into Canberra’s property market was already a struggle, but the current lockdown has made buying a home even more difficult.

From yesterday, lockdown restrictions relaxed for real estate companies, who are now allowed to have one person attend a property to conduct inspections, film or take photographs to help progress a sale.

But while some movement in the market is good news for Canberrans trying to sell, buyers will have to take more risks than usual.

What does buying and selling in lockdown look like?

It is estimated that more than 350 properties were unable to be listed over the first two weeks of Canberra’s lockdown.

“Over the past four weeks we have seen the new listings count across the ACT fall by 16 per cent,” CoreLogic’s head of Australian research Eliza Owen said.

“In the auction market, we have seen fewer properties actually going to auction and more properties being withdrawn altogether.”

But while yesterday’s changes mean that many homes can now be listed for sale, experts warn not to expect a sudden influx of properties on the market.

“[There is] resistance from some people to put their property on the market for some time until they feel that it is safe to do so,” Total Property Management director Craig Bright said.

“We certainly see a tight market continuing in both rentals and sales and that will probably occur until the end of next year at least.”

And if sellers are apprehensive to put their homes on the market, many buyers are likely to be even more nervous.

Physical and individual virtual inspections are still not permitted — so buyers will have to pull the trigger before even stepping foot into their new homes.

But it seems it is a risk that many may be willing to take.

Ms Owen said with a low level of housing stock in Canberra and prices across the city continuing to rise, taking a risk was the only option for many would-be buyers.

Could the lockdown bring down prices?

Unfortunately for buyers, the current lockdown is unlikely to reduce house prices in the capital.

The annual median price in most Canberra suburbs rose by more than 20 per cent from 2019 to 2021 and there has been a rise in prices every month since April 2019.

“I would expect property prices to keep rising through this period,” Ms Owen said.

“You are not getting a big influx of supply and that is typically what would put downward pressure on prices.”

Mr Bright agreed, saying there had been a substantial shortage of stock in Canberra since before the COVID-19 pandemic.

“If these properties are marketed, that is not going to make a massive dent in supply,” he said.

“From what I can see in data there is still a pent-up demand there for people wanting to buy a property.”

Virtual auctions a popular alternative

Homes that have been on the market during the lockdown have been selling, with many agents reporting a 100 per cent virtual auction clearance rate.

Australia’s preliminary clearance rate dropped to its lowest level in more than a year last year, but Canberra bucked the trend with a clearance rate of nearly 80 per cent.

“The clearance rates on virtual auctions have been very high and a lot of those have been to purchasers who have been unable to physically inspect the property,” Mr Bright said.

Online auctions have been so popular, that some agents have taken the “highly unusual” step of requiring prospective bidders to put $1,000 into a trust account before they are allowed access to the auction — a move designed to reduce the number of “nosey neighbours” or other parties who are simply there to watch the show.

The practice also occurred during last year’s lockdown, to help filter out serious buyers from the “sticky beaks” in a crowded virtual room.

“If it was an open link you could end up with a huge number of people,” Mr Bright said.

“It is very hard for the auctioneer to decipher or keep track of genuine bids in those circumstances.”

(Original ABC Article)