Public On-site Auctions
The lifts on public and on-site auction bans are now in effect, and NSW’s government has decided to allow public auctions to go ahead from this coming weekend with Queensland to follow shortly. Initial figures from CoreLogic showed that 60% of 590 capital city homes were sold via online auctions this week, indicating a rise of 19 percentage points from last week’s 41.1%, with Sydney and Melbourne having a recorded 63% clearance rate. However, Domain recorded a lower clearance rate percentage, with Sydney at 50% and just a third of Melbourne homes selling. The Real Estate Institute of Queensland CEO Antonia Mercorella said the Queensland government had already started relaxing some restrictions and the return of on-site auctions gives the sellers hope it may boost the property market. From May 1st, up to six people including the real estate agent can attend an open home inspection, although boardroom and public open homes were still banned. The Western Australian government has also started relaxing some measures around open inspection, announcing last Sunday that up to 10 people at a time would be allowed to attend open homes (AFR, 2020).
The Australian Property Market
The shutdowns from the coronavirus and associated businesses have caused a downturn in the property market. Currently, the economy has experienced a rise in unemployment and a fall in wages, with an expectation of further deterioration. Other short-term rental accommodation businesses such as Airbnb have already been facing challenges due to the pandemic and many now are attempting to find longer-tern tenants. At the same time, many temporary visa holders are leaving Australia due to unemployment. Property vendors are facing a tough market, with discount property listings increasing in Sydney, from 5.7% to 13.1%, and Melbourne, from 2.8% to 10.7%. NAB’s chief economist Alan Oster believes that by the middle of the year unemployment will be higher than 10% and property prices will fall by 15%-30% (ABC 2020).