Fear of second wave in NSW shifts home sales
House hunters have been urged to have their financial ducks in a row given the recent trend of agents bringing forward auction dates over fears a second wave of coronavirus is coming to NSW.
The trend has been prevalent in the weeks since the COVID-19 pandemic resurfaced in Victoria and multiple NSW cases were reported from outbreaks linked to pubs and restaurants.
Buyer's agent and Good Deeds Property Buyers director Veronica Morgan said agents were typically moving forward auctions by about one or two weeks.
"We've been hearing agents in general are bringing forward dates claiming, 'lots of interest' and wanting to finalise deals for their clients sooner than later," said. "In many cases it's more a reaction to the possible threat of a second coronavirus wave."
The co-host of The Lifestyle Channel show Location Location Location said the hastily rescheduled auctions meant buyers needed to be on the ball with due diligence.
"Buyers really need to be super organised, have their finances ready, do building and pest inspections early, do strata searches and have contracts reviewed early," she said. "We're now in a period where agents may change the direction of a sale at any given time."
Ms Morgan added this was not the same mentality as rushing into purchases. "You need to know when to strike, but also when to walk away. Not every property for sale at the moment is A-grade and worth top dollar, some of them are actually rubbish."
Were NSW to go into another lockdown, agents would be even more inclined to fast-track auctions, she said.
"As we've already had a lockdown period where agents had to do things online, they may ramp up things even more. Some will look to sell prior to auction and will move quickly if they get a good offer, so buyers need to be prepared."
CoreLogic data showed the volume of Sydney auctions has been marching upwards over recent weeks and is well up on numbers reported over the same time last year.
Last week there were more than 600 auctions and just under that number over the two preceding weeks. Over the same time last year there were about 350 weekly auctions.
Auctions have also been reasonably well-received from buyers considering the economic conditions - about 60-65 per cent of houses scheduled to go under the hammer over July sold.
The long-term success rate for Sydney auctions is about 65-70 per cent.
Winter is typically the quietest time of the year for auction volumes but the recent surge in sales was partly because of pent up seller activity.
Many would-be sellers pulled their properties from the market during the hard lockdown in April and are beginning to sale again.
CoreLogic head of research Tim Lawless said the market has remained resilient during the pandemic, with prices only falling 2.1 per cent since the peak in April.
"Record low interest rates, government support and loan repayment holidays for distressed borrowers have helped to insulate the housing market from a more significant downturn," he said.
The test for the market would come when fiscal support was wound back from October, Mr Lawless said. "Urgent sales are likely to become more common as we approach these milestones, which will test the market's resilience," he said.
Ms Morgan said quarterly data suggested the volume of transactions in many suburbs was actually rising over the past six months due to a higher number of off-market sales.
Prices were generally holding up but some properties were an easier sell than others, she said.
"There is an abundance of one-bedroom apartments in particular for sale that are sitting on the books and not selling," Ms Morgan said.
"Again, we think this is likely COVID-related. Buyers are likely wanting more space rather than less given how much they've been stuck at home this year, so that could be a reason they're opting not to buy this sort of property.
Cooley Auctions founder Damien Cooley said a possible second wave in NSW was becoming a point of conversation among sellers who were wary of how their auctions might become affected if a second wave of infections caused another lockdown.
But he added pre-auction sales may not be justified at this stage. "There is uncertainty over what's ahead but auctions are still getting good results. July was one of our best months in quite a while," Mr Cooley said.
His auction house reported an average of 4.4 bidders at each auction last month, with bidders placing an average of 14 bids between them. Close to 60 per cent of the properties sold over their reserve price.
"The most important thing is to listen to the advice of your agent," Mr Cooley said. "They will know from experience what's best and it's that experience that you're paying for."
Originally published as Fear of second wave in NSW shifts home sales