John McGrath – Should You Sell In Lockdown This Spring
If you’d like to sell this Spring but you’re in a COVID locked down market, you might be wondering whether to go ahead or wait until restrictions are lifted. Here’s my advice.
Firstly, Spring is traditionally the busiest season of the year, with an average 15% increase in the number of homes for sale nationwide during the warmer months of September, October and November.
On a historical 10-year average basis, about 42,100 properties come to market per month across Australia, according to CoreLogic data. This jumps to 48,700 per month during Spring.
However, this seasonal surge is unlikely to materialise at the same level this year – at least, not in the locked down markets of Sydney, Melbourne, Canberra and many regional areas of the East Coast.
New supply of homes for sale is likely to stay low in locked down markets, particularly Melbourne and Canberra where buyers are not allowed to inspect a home. That creates an almost-total pause in trading activity, as very few buyers are willing to purchase a property without setting foot inside it.
But what about Sydney, where buyers are allowed to inspect properties on a one-on-one basis with an agent?
Firstly, let’s agree that it’s always better to sell when you can do opens and on-site auctions. No brainer. But that’s not our reality in Sydney, as we begin the Spring season this week, and this reality isn’t likely to change until at least half way through the season.
Here’s what you need to consider.
If your life circumstances mean you need or want to sell sooner rather than later, then I say list with confidence in early Spring and expect your agent to deliver a strong sale price.
Sydney sellers do not have to compromise on price because of lockdown. All lockdown is doing is changing selling procedures.
Prices remain consistently strong because during lockdown, demand is steadily high (due to record low interest rates) and supply is steadily low because many vendors hold off. This creates a very favourable supply/demand dynamic for sellers and it’s resulting in strong prices in many areas.
I think this more than offsets the negative of not being able to conduct opens and on-site auctions. Your agent will be run off their feet conducting 20 or 30 private inspections but that’s what you’re paying them for, so don’t worry about it. Agents have to work harder right now.
There’s another reason to go ahead and list now, despite the lockdown.
To date, after every lockdown we’ve seen an immediate surge in market activity. A lot of delayed listings come onto the market, all at the same time, and prices have generally remained stable or lifted higher, indicating there’s been enough demand to meet the post-lockdown rise in supply.
This is likely to happen again in Melbourne and Canberra as soon as inspections are allowed again.
Sydney is a different story. The city has been locked down since June 26, which means the build-up of delayed campaigns is getting pretty big. And it’s likely to keep building for at least another six weeks. This is because NSW Premier, Gladys Berejiklian has already told us that nothing is changing until we hit 70% double-dose vaccinations in NSW, which is not expected til mid-October.
That’s halfway through the Spring season.
At 70%, she says there will be more freedoms for fully vaccinated people. We don’t know what these freedoms will be, however let’s assume they include allowing opens and on-site auctions again.
The risk for Spring sellers who wait til then is they’ll be going to market with all those delayed campaigns from July, August, September and early October. Will buyer demand be strong enough in October, November and December to clear six months’ worth of stock before Christmas?
No one really knows the answer to that question.
So, if you decide the best course of action is to go to market now, I have a couple of tips.
- Choose your agent very carefully. I always talk about how important this is, however it’s even more important in lockdown. Your agent will have to juggle a lot of private inspections, so ask them how they are managing this; and also ask about their COVID-safety practice
- Invest more in your marketing. Buyers are being very discerning about which properties are worth individual appointments. So, give them more photos, a floor plan, and a professionally shot video. All of this will help convince them that your home is worth their time
Good luck to all buyers and sellers in the market this Spring season.
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