Weekend reads – Must read articles from the last week

There are more interesting articles, commentaries and analyst reports on the Web every week than anyone could read in a month.

Each Saturday morning I like to share some of the ones I’ve read during the week.

The weekend will be over before you know it, so enjoy some weekend reading.

Winter a prime time to sell as spring property market blooms early

Will the property market see an early spring bloom?

This article on Realestate.com.au looks at why winter could be the prime time to sell.

Australia’s peak springtime property market is likely to land early this year as COVID-19 restrictions ease across the country.

The spring season has traditionally been the most effective and popular time to sell homes with the weather warming up and gardens in full bloom.

But property analysts and real estate agents say this winter could prove a wonder and a prime time to sell as markets start to pick up amid the winding back of government restrictions and newfound certainty amongst both buyers and sellers.

Buyers are back

Nerida Conisbee, chief economist at realestate.com.au, said the fallout of the COVID-19 pandemic, lockdowns and economic crunch had caused a short supply of stock, but more people were keeping a keen eye on the market and searching realestate.com.au.

COVID-19: Current market update

“We are seeing a definite recovery in the buyer market so buyers are there and are very active on-site, but most importantly, they are also inquiring,” Ms Conisbee said.

“In terms of seller activity, we are starting to see a flattening out of listings in Sydney, so that is good news. Elsewhere it is still well down compared to the same time last year, but it’s definitely moving in the right direction.”

Ms Conisbee said rental markets were also on the improve after a surge in rental listings with the onset of COVID-19, with people moving in with relatives or to house-sharing arrangements. That increase was now petering.

Sales director at Marshall White – Stonnington, John Bongiorno, said “buyers are certainly coming back”.

“They’re not getting carried away by prices or getting carried away by the market or anything, they’re being sensible about what they’re paying,” he added. “I think prices are remaining static at the moment and that’s the way that I think it’ll be for some time.”

Strong search activity hints at early stages of recovery

Latest data on the volume of searches for properties for sale on realestate.com.au shows search activity hit a new record last week, rising by 0.5%.

Search activity is now up 37.7% year-on-year and is 62.6% higher than the low in March. It has now grown for nine consecutive weeks, but the rate of growth is slowing.

Ms Conisbee said renewed interest was indicative of the early stages of a recovery, but warned some parts of the market would take longer to recover than others.

“If you have a look at a house in a nice area that’s got good amenity, that’s probably going to hold up OK, whereas if you go to high development areas, particularly those located close to universities that may rely on foreign students or rely on investors, they’re the areas that will struggle,” she said.

“We’re seeing this big surge in first home buyer activity, but investor activity just hasn’t returned and is seeing very low volumes of inquiry.”

Early spring rush could be on the horizon

Mr Bongiorno said he’s expecting “a very different winter” this year as demand continues to move upwards.

“We’ve seen demand increase week-on-week since Easter and there have been a number of examples of expressions of interest and even private sales that have exceeded market expectations,” he said. “It’s giving vendors more confidence.

“July is traditionally our quietest month of the year next to January but we believe this July will be quite busy because Victorians who usually go up to Queensland will be around, and we’re actually booking quite a number of auctions in July, we’ve already exceeded our auction numbers for July over the last five years.”

Bronte Manuel, director of residential sales at Toop & Toop agency in Adelaide, predicted a premature spring rush. He said while stocks were low, there was a strong appetite to buy.

Mr Manuel said despite restrictions of 10 people at an open for inspection at a time in South Australia, Toop & Toop attendances had increased by 20% a week.

“I had an auction in West Croydon on the weekend. Before COVID-19 the price was $614,000. We had a lot of interest and 30 odd bids and sold it for $628,000 so we’ve come out of a good market, gone into COVID and we’ve trumped that price,” he said.

Andrew Chamberlain, managing director of Canberra agency Blackshaw, said the market was moving.

“The market is coming out of its winter hiatus,” Mr Chamberlain said.

“The underlying strength in the market is as strong as I’ve seen it. We finished May with 6.3 registered bidders on average for the month and that’s the highest it’s ever been.

“There’s been a hesitation to list (properties for sale). I’m in no doubt there are people who would have been in the market to buy whose circumstances have changed and they are no longer buyers.

“But it’s more the case where it seems to have affected the actions of sellers and that’s why we have very healthy market conditions.

“I don’t see us having an overcorrection in terms of such a large increase of properties coming onto the market where it overwhelms the current demand, but certainly anyone putting their property on the market is almost guaranteed to be met with a high degree of inquiry.”

Read the full article here

GDP heads into the abyss…

What does the recession really mean?

This Blog by Pete Wargen looks at the statistics.

Recession all but locked in

GDP growth was estimated at a seasonally adjusted -0.3 per cent for Q1, leading to the inevitably mind-numbing ‘recession we had to have’ headlines.

Over the year GDP growth slowed to +1.4 per cent.

Q1 could yet be revised up, of course – especially the very significant negative drag from inventories – and therefore the technical definition of a recession may yet be avoided.

However, given that GDP growth in Q2 will clearly be severely negative this is largely semantics.

Nominal GDP growth over the year is floundering again.

Read the full article here

Home values fall slightly in May amid COVID-19 crisis, new figures show

It looks like home values have fallen in May.

This article from Domain.com.au explains how coronavirus has impacted the results.

Property values across Australia have fallen for the first time since June last year, as the economic impacts of the coronavirus pandemic take a toll on sales.

But Australia’s property market may be in for a softer landing than projected, with the latest CoreLogic Home Value Index, released on Monday, showing the combined value of houses and apartments dropped only 0.4 per cent last month to a national median price of $557,818.

CoreLogic head of research Tim Lawless said: “Considering the weak economic conditions associated with the pandemic, a fall of less than half a per cent in housing values over the month shows the market has remained resilient to a material correction.

“With restrictive policies being progressively lifted or relaxed, the downwards trajectory of housing values could be milder than first expected.”

Values fell across five of the eight capital cities in May, dropping 0.9 per cent in Melbourne to a median of $686,798, 0.4 per cent in Sydney to $885,159 and 0.1 per cent in Brisbane to $508,386.

Values also dropped 0.6 per cent in Perth to $443,669 and 1.6 per cent in Darwin to 393,939, however they were up in Adelaide, Canberra and Hobart, which had the largest gain at 0.8 per cent.

CoreLogic head of Australian research Eliza Owen said the fact the falls were only minimal was encouraging.

May had been a more positive month for the real estate industry than expected, given almost 600,000 Australians had lost their jobs in April and many more had seen their work hours reduced, she said.

“Even with some cities increasing over the month, it’s clear the momentum has slowed across the capitals,” she said.

“Even though values did fall, they fell by less than half a per cent. Overall this suggests some stability in the housing market.”

Home values across regional Australia remained flat over the month, at a median of $397,388, however Ms Owen said these markets typically saw a lag in price movements.

She expected they would see more downward price pressure in the coming months.

“What we’re seeing in the listings data is that not many people are selling because not many people have to sell as a result of the banks offering mortgage pauses,” she said.

“This has left property prices more resilient to the property downturn.”

September would be a real test for the market, Ms Owen said, as that was when many mortgage holidays and Job Keeper support payments were due to run out, although she said offers by the banks for buyers to switch to or extend interest-only mortgage payments could provide a buffer.

There were still pressure points in the market, though.

Ms Owen noted the drop-off in overseas migration had left Melbourne’s housing market, which recovered from the previous downturn faster than Sydney, particularly exposed.

It was the first capital to see values falls, recording a drop of 0.3 per cent in April, and the only capital to record a decline over the three months to May, with the median dropping 0.8 per cent.

Read the full article here

HomeBuilder Scheme Explained: How to access $25,000 for home renovations

What does the 25k HomeBuilder scheme really mean?

An article from 9news.com.au breaks down all the most commonly asked questions.

Read the full article here