The strong performance of the Sydney property market before the coronavirus crisis struck suggests a resilience in buyer interest that could spur a bounce-back when restrictions are lifted.
Data shows values in the Sydney market grew 13% in the year to March on the back of an increase in sales volumes of 25%.
Fears for job security and double-digit unemployment because of the COVID-19 lockdown are dampening market sentiment currently, and this will be reflected in the next set of CoreLogic data.
One key indicator that will likely increase is days-on-market.
Sydney produced a remarkable performance for the year to March with properties taking just 33 days to sell. This compares with 69 days for the corresponding period in 2019.
The result indicates a pent-up demand for houses and apartments. It will likely take a few months after the lockdown for that speed of transaction to return. Much will depend on not only the growth of employment and re-employment but also the attitude of banks to releasing credit.
Uncertainty caused by the pandemic has created strong buying opportunities in Sydney right now, even though many vendors have withdrawn from the market to see what will happen.
New listings in Sydney were up 10.8% in the year to March, but the industry expects these to fall significantly for at least the next couple of months due to virus-related restrictions, such as a moratorium on open houses and on-site auctions.
This sentiment is a big swing from the strength evident just a few weeks ago. Instances of price discounting in the year to March was down 7.6% compared with the corresponding period in 2019.
One early indicator of the coronavirus to show up in the data is the national auction performance. The number of properties under the hammer dropped 50.2% while clearance rates were 37.3%.
More significantly, two-thirds of property due to go to auction was sold before it went under the hammer. This is an unusually high percentage and indicates vendors were taking offers and buyers remained sufficiently confident to commit to a purchase.
