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The perfect mix of the lowest interest rates on record and massive demand outstripping supply means ‘there’s never been a better time to list’ homes for sale, say industry experts.
Ray White Group managing director Dan White and Loan Market executive chairman Sam White said the family’s real estate offices were seeing traffic at levels that were 24 per cent higher than the same time last year.
“They’ve had 9,640,000 – more than a third of the Australian population – visit (online), and that’s up 24 per cent on last year,” Mr White said.
“The competition for property is as strong as ever – and with demand very much outstripping supply right now – there’s never been a better time to list your property.”
“Addressing the question of whether to sell now or wait, given the conditions we’re seeing now and the potential risks in the market later this year, it seems hard to see why anyone would wait.”
The Ray White Group has existed in Australia since 1902, with offices in all major markets here.
Dan White said Australians had a deep love for real estate.
“In times of uncertainty they still believe in it. It’s a safe haven,” he said. “The last couple of months more than ever we’ve seen that resilience, that faith in the market come through, driven largely by interest rates.”
Sam White said during the lockdown period, inspection activity saw a big drop-off from 14,000 on March 16, before dropping to 4,000 (individual inspections) when open homes were banned, before things began to shift on April 27.
“June 8, 20,000 people came through a Ray White open home that week and that is about 30-odd per cent higher than where it was before COVID-19 came through. So it’s not just online traffic we’re seeing, it’s also real world traffic through open homes.”
He said the finance side of the transactions was very busy, unsurprising given how low interest rates were now with a “strong level of pre-approvals than what there was last year”
“Whilst numbers haven’t come back to pre-COVID-19 (levels) in terms of pre-approvals, what you can see is a stronger bounce than this time last year.”
Variable interest rates were as low as 2.63 per cent now, he said, adding. “this is phenomenal”.
Around 22 per cent of applications they were seeing for finance was coming from investors “which is around about normal”.
He said one of the trends now was that the turnaround time for lenders varied widely.
“The time it takes for lenders to say yes to a deal is increasingly variable, some at two days and some at 15 or more days.“
He said this potentially placed pressure on being able to meet purchase settlement deadlines.
“As for buyers, trying to game the system and wait to pick the bottom is a dangerous game,” he said. ““Things can move against you, and you risk not being able to get that thing you really want, especially if it’s a family home.”
Dan White said listings were beginning to come back to meet the strong market demand.
“We’re now seeing the new listing numbers come back up. and we’re signing up new listings at same rate as we were 12 months ago” though total listings were still down between 4-5 per cent on last year’s figures.
“The market has been good to sell into,” he said. ““Now is a good time, there are buyers out there, there’s less stock to compete with yours.”
He said “surprisingly, the real estate curve is very consistent across the market. Maybe Sydney is starting to pull ahead of the others, but other than that it’s a really consistent trend across the board.”
Sam White said “longer-term, there seems broad agreement that Australia’s fundamentals post-COVID-19 should remain strong. Property investment has, and will always be, a long-term investment”.