The spring selling season begins this week, but it’s unlikely to be similar to years gone by.
Usually, the start of September sees a huge influx of listings on the market with vendors hoping to capitalise on a traditionally strong selling season.
This year, though, the increase in listings is set to be much lower than ever before.
According to new research from CoreLogic, the number of listings remains well below average for this time of year. Indeed, over the previous four years, the number of listings generally increased about six per cent between July and August.
This year, however, has seen a reduction of nearly 10 per cent over the same time period.
It’s important to understand that it’s mainly Melbourne that is dragging down the national listing numbers, given it is still in the midst of a lockdown.
That said, I don’t think anyone expects the market over the next few months to reflect historical averages when it comes to listing numbers.
But there is no question that the low volume of listings continues to underpin property prices with robust demand for good opportunities.
But even when confidence improves, and more listings become available, that doesn’t mean that property prices are about to tank.
Of course, we are all in uncharted territory with the pandemic, but looking back can provide some insights of what may be ahead.
Real estate resilience
Indeed, new research from the Property Investment Professionals of Australia (PIPA) and CoreLogic has identified the best performing capital city and regional locations three years after the GFC, which was our nation’s most recent economic downturn.
PIPA is the peak membership organisation for the property investment industry, with the objective of representing the sector and raising the professional standards of all practitioners.
I am proud to be a member of PIPA, which means I adhere to a code of conduct that serves to protect consumers seeking independent property advice.
Getting back to the research, though, it’s clear that property prices have a history of holding their ground during tumultuous times.
In fact, the research found that capital city dwelling values had increased by up to 39 per cent over the three years from the end of December 2008 – a time when Australia was emerging from the global economic crisis and government stimulus was ramping up.
And the strong results weren’t limited to capital cities, with dwelling values in regional areas also increasing by up to 65 per cent over the same time period.
These sorts of results reaffirm the resilience of real estate during times of economic troubles – no doubt due to property being a fundamental need for all of us no matter what is happening in the wider world.
Plus, property investment should also always be a long-term strategy, which means that the temporary ups and downs of market conditions are not overly important.
What is vital is ensuring you secure the right types of properties in the right types of locations that are primed for robust capital growth and reliable cash flow in the many years ahead.