1:3 New Listing to Sales Ratio Driving Sales.

We may be deep in July’s winter cold but we have seen red hot results in the last week with ten exchanges and multiple properties under contract this month, bringing us to a total of over 80 sales so far this year as we wrap up July.

This week’s standout transactions are:

• A two bedroom apartment on George Street, North Strathfield - sold by Paul Caradonna for an outstanding $765k.
• A family home at 10 David St, Concord – selling prior to auction.
• 44 Correys Avenue, Concord - fetching $1.85M. Of course in case you missed it, last week 66 Correys Avenue also set the 2020 record sale price for Concord.

Supply remains limited as more homes are still being sold than those entering the market. New listings may have risen over 40% since early May across the board, however the total number of listings has reduced 3% over the same time, showing that for every new listing, there are three sales occurring.

The most notable shortage on the current market are family homes valued between $2.2-$2.5M, and this has helped push along serious buyers who come across suitable property and are well aware that the longer they wait, the higher their risk of missing their opportunity to seize a sale.

This week, we unpack the full spectrum of changes we’ve seen over July - including new and extended government stimulus packages, the impact of COVID on the market in the last four weeks, where interest rates and finance has headed, and explore some interesting insights into buyer sentiment on the property market.

Auctions

In the week ending 27 July, 602 Sydney homes were taken to auction and returned a preliminary clearance rate of 68.3%, 7% higher than what Sydney experienced last week.

Government stimulus

Where do we start?

The Federal government announced last week that both JobKeeper and JobSeeker payments will extend beyond their original September cut off date, with a reduced JobSeeker payment to run until the end of the year, and a two-tier JobKeeper program until March 2021.

The State government also announced this week it would temporarily halt stamp duty on new homes under $800,000 for first home buyers, increasing the threshold from $650,000 for new homes and vacant land from 1 August. This is in addition to the $10,000 first homeowner grant still available to first home buyers purchasing a new home under $600,000, providing huge advantages for this demographic the current environment.

COVID impact on the market as at July

The overall impact of COVID on Sydney’s property market has been fairly minimal, with price falls significantly cushioned by government intervention - such as the various economic stimulus packages and extensions, outlined above, pressure relief on mortgage holders offered by extended holiday periods for repayments, and record low interest rates which have complemented the efforts to uphold home values and prevent distressed sales.

Forecasts for the housing market remain relatively unchanged this month, and despite uncertainty, change has been slow paced, steady, closely monitored and responded to accordingly.

Interest rates

The Reserve Bank of Australia met earlier this month and announced it would continue to hold interest rates at 0.25% for a prolonged period. Their statement referred to recent improvements across a number of leading indicators, and demonstrated stabilisation of markets which highlighted the expected decline to be much less severe than initially expected.

The RBA also reinforced the importance of acknowledging that our recovery remains an ongoing process, and that the future position of Australia relies on the permanent containment of the pandemic.

Finance

Aligning their policies and decision making with the RBA’s statement this month, Australian banks have announced they will extend loan deferrals currently being provided to mortgage holders who have delayed their repayments, ensuring up to four more months for those who still require it.

This is being offering in addition to further options to assist mortgagee’s, including extending loan lengths, changing to interest-only payments for a certain period, refinancing and consolidating debt to support the extended deferral period on offer.

Buyer sentiment

Findings captured in a media release by St George Bank has given us a glimpse into buyers’ thoughts and attitudes towards the property market at present, highlighting one in every 10 Australians looking to purchase are in the market for the first time.

It also states that a third of Australians want to meet their deposit savings goals as quickly as possible, even in the current environment, so they can find themselves in a position to purchase property sooner.