We know that property sellers are on strike at present.
Discretionary property vendors are holding back at the moment waiting for signs of improvement in our property market.
But two encouraging reports this week suggest buyers are back out in force.
Property portal realestate.com.au found the buyers across Australia have well and truly woken up from their COVID-19 slumber and their new Weekly Demand Index, which looks at the volume of high intent buyer activity on their website, shows buyers with intent are back in force.
The data from realestate.com.au indicates that it isn’t just search volumes that are climbing, we are also seeing a significant increase in the volume of people searching that are in the late stage of their purchase decision.
Similarly ANZ Bank's Housing Search Index (HSI) which combines internet search numbers for house-buying related terms has also shown positive movement.
In a recent report the ANZ Bank said...
The market has not remained immune to the economic turmoil from COVID-19, with the banning of in-person auctions and open homes during the height of the pandemic.
Auction clearance rates fell sharply during the restrictions while house prices fell 0.4% m/m over May.
The recent removal of the ban on in-person auctions and open houses in a number of states should support a lift in housing market activity.
There has also been a general lift in consumer sentiment, as the spread of the virus appears to be relatively contained.
But we don’t think this will be enough for the housing market to return to pre-pandemic trend.
The labour market is in a weak state, which has implications for wages.
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And rental vacancy rates have jumped sharply as people have left Australia and fewer international students are arriving.
In mid-April the ANZ Bank's Housing Search Index (HSI) suggested that house prices may be in the process of falling quite sharply.
The search data since then have picked up relatively strongly, however, consistent with the lift in the auction clearance rate.
Though the HSI still suggests house prices could fall in the coming months, the declines implied are more moderate than previously suggested, with house prices dropping around 1.5% from May to August.
ANZ's Housing Credit Impulse (Figure 2) is also suggesting annual house price growth is likely to turn over in coming months.
Beyond this, and based on our assessment of the fundamentals, we remain of the view that house prices will fall materially into 2021 as demand retreats on the back of deteriorating household finances and reduced population growth as border closures reduce net migration.
Government stimulus may delay this weakness, but it won’t be enough to prevent lower house prices eventually.
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