Brighter Buying

Market update: Transaction numbers will be hit first, then prices

by Dan D'Silva, Property Consultant 9 April 2020

More than half of the 2684 homes scheduled for auction last weekend were withdrawn beforehand, with many vendors instead choosing to sell their homes by private treaty, postpone the auction date or take their properties off the market altogether.

“What we have seen in those numbers is many actually switched to sell by private treaty. So it doesn’t necessarily mean they’ve withdrawn their properties from the market totally”, Domain senior analyst Nicola Powell said
According to the Financial Review, Brisbane-based buyer’s agent and investor adviser Pete Wargent said the latest data showed the auction market was “basically dying”, adding that the impact of COVID-19 on the residential market would first hit transaction numbers rather than prices.
“But if it rolls into an economic shock over the coming six to 12 months, then rising unemployment and forced selling, obviously, becomes a much bigger issue and then you will see prices dropping as well,” Mr Wargent said.

For us locally, we expect the residential market to react in a similar fashion to Hong Kong after the SARS outbreak in 2003.

One of the first things to pull back was the number of transactions, and then eventually that led to price falls. We’re anticipating the same thing to happen across Australia.
However, if we can contain this virus quickly we will see a pretty robust rebound.
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