Demand for property reaches an all-time high

It appears nothing can slow down the red hot property market as both demand and transaction numbers continue to skyrocket.

A new report from REA Group has highlighted the fact that sales numbers are almost 50 per cent higher than the same time last year, while inquiries are at record high levels.

The PropTrack Housing Market Indicators Report shows Australia’s largest markets, Sydney and Melbourne, continue to see the largest increases in market activity and REA believes demand will be strong as we head into the end of the year.

The report shows that demand for property is hitting all-time highs with sales volumes climbing 12 per cent in the week ending 10 October, which is the highest level in more than three months.

For the year-to-date sales volumes are up 47.5 per cent than the same period last year and 61. 7 per cent higher than the same period in 2019.

PropTrack Senior Economist and report author, Eleanor Creagh, believes the property market will remain strong to close out the year.

“Constrained supply of properties available for sale, coupled with elevated buyer demand, has resulted in record high demand on in September, outpacing the all-time high reached in August,” she said.

“Preliminary weekly sales volumes to-date this year are almost 50 per cent higher than over the same period last year.

“It’s particularly promising for Australia’s largest markets, Sydney and Melbourne, where we are seeing big jumps in market activity as freedom for both cities is now well in sight.

“The momentum should continue in October as restrictions ease further and mortgage rates remain low.”

The REA report analyses consumer behaviour in real-time, using property market insights from the 12.6 million Australians who visit each month.

Despite some headwinds, with news that APRA is tightening lending criteria, the PropTrack report makes it clear this shouldn’t impact borrowers in the short-term.

REA also notes sales volumes appear to have turned a corner in locked down states, with rises of 60 per cent in Victoria and 68 per cent in the ACT, while NSW is 4 per cent higher.

Search volumes also climbed throughout September, with national rates just five per cent off the record set in February this year. But they are still 18.1 per cent up year-on-year.

The number of email inquiries to agents on jumped 14.6 per cent in September to eclipse the previous record set in August.

Interestingly it was states in lockdown where property seekers were most active.

Of the inquiries, 62 per cent were for houses, 29.8 per cent was for units and 8.3 per cent was for land.

While the higher-end properties, those priced above $1 million are still attracting more interest than those priced under $500,000.

In the combined capital cities in September 44.2 per cent of buyers searched for properties listed at or above $1 million, while 43.1 per cent searched for properties listed at between $500,000 and $1 million.

The 12. 7 per cent of searchers were for properties under $500,000.

After an impressive 12 months of gains, Ms Creagh believes that growth will continue, however, the rate of increases will likely ease.

“The runaway price growth we’ve seen this year is likely to ease, given the benefit of lower mortgage rates appears to have already been baked into prices. We’re also facing new macroprudential headwinds.”

“While these changes will only marginally impact borrowing capacity for now, the Australian Prudential Regulatory Authority (APRA) has left the door open to potential further tightening.”

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Rowan Crosby

Rowan Crosby is a freelance journalist specialising in finance and real estate.