Property sales slower, but not stopped in Sydney lockdown

Properties continue to transact in Sydney despite the city’s latest lockdown, with buyers and agents leaning on technology as they adapt to the challenging market conditions.

Current restrictions in place in New South Wales include a ban on in-person auctions, while inspections of properties can only be conducted for one person.

Real Estate Institute of NSW chief executive Tim McKibbin said that while lockdown had set in, agents were well prepared.

“Adaptation is becoming the norm and it’s working, as buyers remain engaged and properties are transacting,” Mr McKibbin said.

“There have been examples in recent weeks of properties selling sight unseen and completely contactless. 

“Some buyers have been satisfied by a virtual tour to make an offer, which was subsequently accepted, and the parties have docu-signed on the dotted line.

“We can expect more examples of pivoting in coming weeks as agents facilitate innovative ways for buyers to make property purchases."

Mr McKibbin said Sydney’s market had started to cool slightly prior to the COVID outbreak, and while prices were still growing, the pace of growth had slowed.

“There’s a possibility that we could be set for a mini-spike when we come out of lockdown, when buyers who have had their plans temporarily interrupted re-emerge with purpose,” Mr McKibbin said.

Ray White NSW last week embraced the lockdown challenge, launching a comprehensive training program for its network of 1,000-plus real estate agents and property managers.

Much of the training focused on how to handle an online auction, as well as advice from Ray White Quakers HIll principal Josh Tesolen, who sold 44 properties during the last eight weeks of lockdown last year.

The lockdown has also given a boost to online auction platform Grays Marketplace, which has reported strong buyer demand from owner-occupiers as well as investors.

Grays chief executive Chris Corbin said several properties sold during Queensland’s recent circuit-breaker lockdown were indicative of the ease of selling a property online.

Meanwhile, the NSW state government has instituted a 60-day moratorium on evictions to help protect renters whose incomes have been impacted by the new lockdown. 

Shannyn Laird, Head of Customer Experience at property management agency Different said it was a positive development to see the governmnet move quickly to provide assistance.

“We’ve already had numerous tenants reach out to us, stressed about how they will pay their rent due to lockdown so this news will provide much needed comfort to both parties," Ms Laird said.

“In saying this, we’ve already seen parties come to the table early to negotiate and agree on a way forward.

"The reality of the situation is that unfortunately this is not the first time we’ve been placed in lockdown so it’s not such a shock to ask for a reduction or rent freeze this time around.

"We’re seeing renters and owners moving faster and be more transparent and reasonable with their asks — both in what owners can grant renters, and what renters are asking for from their property owner. 

“We are feeling confident in having these conversations and positive about helping both parties land on a position they're both able to accept.”

Sydney’s latest lockdown comes as new research laid bare the impacts of shutting cities down on property markets around the country.

CoreLogic head of research Eliza Owen said with Australia’s slow vaccine rollout and low vaccination rate, it was likely that lockdowns would be an ongoing challenge.

Looking back at previous lockdowns, CoreLogic’s research showed that while transaction activity typically slowed significantly in a lockdown, once restrictions eased they quickly caught up.

Property values have also been largely resilient, but Ms Owen warned that was likely due to government stimulus and institutional support, a factor which was not certain to continue going forward.

“It is true that demand takes a hit during lockdowns,” Ms Owen said.

"There was a lot of uncertainty amid stage two restrictions nationally last year, and sentiment for housing market outcomes plummeted.

“But supply also declined, because sellers and agents knew it may not be the best time to market property.

“That helped to balance out the overall effect on prices.”

However, the research showed that the longer a lockdown dragged on, the larger its impact on auction clearance rates and sales prices.

Ms Owen said Melbourne’s extended lockdowns brought with them a far lower volume of property auctions.

“This is presumably a result of vendors and real estate agents being more selective about the kinds of properties they were confident in taking to auction,” Ms Owen said.

“This is also reflected in lower rates of properties ‘passing in’, along with a larger number of cancelled or postponed auctions.

“The cancellation of auctions may reflect agents only auctioning properties during lockdown that they are confident will sell.”