Record demand from buyers who face less choice and rising prices

Buyer demand has reached record levels despite lengthy coronavirus lockdowns in the nation’s biggest property markets of Sydney and Melbourne, but purchasers have limited choice as prices continue to rise.

The latest REA Insights Housing Market Indicators Report showed demand, based on the number of views per listing of properties for sale on realestate.com.au, hit an all-time high in August, ahead of a delayed spring selling season in locked-down markets.

The limited housing stock available for sale and prolonged COVID lockdowns in a number of states and territories have created difficult conditions for buyers, realestate.com.au director of economic research Cameron Kusher said.

“With lockdowns expected to continue in the ACT, NSW and Victoria, we may not see this demand pressure alleviated until seller confidence returns and the volume of new supply increases once lockdowns end,” Mr Kusher said.

“This disconnect between the supply of stock for sale and buyer demand is likely to create upwards price pressures.”

Prices have increased rapidly during the pandemic with realestate.com.au data showing a 20.8% increase in national property prices over the 12 months to August.

New property listings have fallen nationally as the latest COVID outbreaks and lockdowns hit vendor confidence, with buyers scrambling to buy whatever they can as prices jump.

Mr Kusher said the ongoing reduction in the volume of stock available for sale coupled with elevated search volumes resulted in record high interest from buyers in August.

“It is likely pent-up supply and demand will be released once lockdowns ease and the typical increase in new listings that comes with spring could help provide buyers with more choice and reduce some of the competition for individual properties,” he said.

The surge in prices, the lack of stock for sale and latest lockdowns have not dampened buyer interest.

Wednesday’s report showed views per listing reached a new high after a 1.2% rise in August, to be 46.7% higher than the same time last year.

Mr Kusher said demand based on views per listing increased during August everywhere except Victoria and the ACT, which recorded falls of 6.7% and 3.7%, respectively. South Australia (up 11.2%) and the Northern Territory (up 8.3%) experienced particularly large monthly increases.