Ray White Group Managing Director Dan White, NSW CEO Andrew McCulloch and Chief Economist Nerida Conisbee joined Loan Market Group Executive Chairman Sam White as they unpacked the biggest issues facing the New South Wales property market in a webinar on Thursday night.
During the half-hour session the group of industry experts discussed whether the lockdown could break the boom, interest rate rises and the outlook for spring.
“Prices have accelerated far more quickly through COVID-19 than they otherwise would have, driven by a combination of exceptionally high savings rates partly as a result of huge government stimulus and record low finance,” Ms Conisbee said.
“But sellers have become more hesitant over lockdown and this has also impacted the number of auctions proceeding with many moving to private sale or selling prior.
“While sellers are holding out, we have not seen a similar hit on buyer demand. With fewer auctions taking place, the average number of active bidders was at 5.25 per property last week and at its second highest level recorded.”
During the Q&A session, Mr Dan White warned sellers to be careful about the broader consensus and to think about the specifics of the market.
“What’s different between this lockdown and last year? There is no JobKeeper, HomeBuilder or first home buyer grants and we’ve also seen a 20 per cent price rise in Sydney so it’s dangerous to assume that we will bounce back out of lockdown like last time,” Mr Dan White said.
“We don’t know what the future market conditions will look like but right now the market is trading strongly. Buyers are competing above expectations and there is a risk in waiting till later.”
He added that there are many benefits to selling in this market, including record numbers of active bidders at auctions and fewer listings, meaning less properties to compete with.
“We haven’t seen this many bidders before and we’ve never seen such a quick pullback in stock but people are still happy to buy through lockdown. These are really strong reasons to transact,” Mr Dan White said.
“There will be more properties coming on in the spring months based on what we’re seeing, with people waiting for the traditional selling season. If you want to transact, now is a great time but you also need to be actively looking for your next property.”
The webinar also addressed housing finance data, which showed no shortage of well funded buyers. Home loan commitments reached $11.1 billion in New South Wales in June.
This was close to double the amount seen in May 2020 when sentiment was at its worst, and more than $2 billion more than we saw in the last lending peak in 2017.
When asked what could slow housing finance, Mr Sam White said the big things that can slow demand are interest rate rises or restrictions on what banks are able to offer.
“It’s amazing to look at where we were 12 months ago and compare it to now,” Mr Sam White said.
“Right now there is strong demand across the country, in particular in New South Wales. Applications and pre-approvals are as strong as they have ever been.”