There has been a trend of agents bringing forward auction dates across New South Wales over fears of a second wave or coronavirus. Licenced Conveyancer, Rachel Godden, takes a closer look at the NSW property market and what agents are experiencing.
A trend has been prevalent following the spread of COVID-19 across Victoria and new restrictions being put in place in New South Wales. With outbreak clusters being reported, auctions that were planned ahead of time are being bought forward one to two weeks to finalise sales prior to any further outbreaks taking place.
“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 Buyer’s Agent and Good Deeds Property Director, Veronica Morgan.
“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.”
“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.”
In the first week of August, Core Logic recorded that there were 692 Sydney homes set to go under the hammer, an increase of over 20% on the previous week’s volumes (566) and almost double the number of auctions held over the same week last year (367).
On realestate.com.au, the latest auction results and property sales for the first week in August, 2020, showed 74% of houses sold at auction and 1,365 private sales also occurred during this week.
Based on this data, New South Wales recorded the highest sales results compared to any other state or territory.
Winter is typically the quietest time for auction volumes, however with eager sellers to move property during the spread of COVID-19, this has contributed to a recent surge in sales. Many properties which were pulled from the market during the hard lockdown in April, have put their properties back on the market.
Tim Lawless, Core Logic’s Head of Research, said the market has remained resilient 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.
It is expected that interest rates will remain at a record low for some time to help keep the economy stimulated.
What else is trending in New South Wales Property?
Increase in demand for First Home Buyers:
As of 1 August 2020, the NSW government has made changes to their thresholds for eligible first home buyers. For new homes a full exemption is available if the home is valued at less than $800,000 and a concessional transfer duty rate will apply for houses between $800,000 to $1 million. Existing homes provide a full exemption value at less than $650,000 and a concessional transfer duty rate between $650,000 to $800,000 and vacant land less than $400,000 is exempt and a concessional rate is available from $400,000 – $500,000
This exemption is providing first home buyers some relief when hunting for houses in a lower price point.
It is expected that buyers won’t be the only ones who respond to the stamp duty concession incentive, but sellers may be inclined to position their sales price just under the cut-off point to appeal to buyers in this bracket. Core Logic sales volume data across NSW shows that there was a bunching of sales between the $640,000 and $650,000 price point between July 2017 and June 2020. We may start to see price clustering move up to the $800,000 mark with the introduction of the new stamp duty exemptions.
Low interest rates and strong competition
The Board of the Reserve Bank of Australia has been very clear that interest rates will remain at their current settings so long as unemployment is elevated, and inflation remains below target.
Currently home loan rates are at their lowest they have ever been. Lenders are doing everything they can to attract borrowers. In addition to low rates, there appears to be a trend with several lenders offering cashback deals (one-off sums usually between $1,000 – $4,000 paid out to customers). Cashback deals can be put towards a borrower’s mortgage or used for any other purpose.
Other lenders are offering deductions on Lenders Mortgage Insurance to entice borrowers and stand out from the competition.
Terms, conditions and exclusions apply so it is important to understand the product you are committing to in addition to the promotional offer.
How can Attwood Marshall Lawyers help?
For those in a position to buy, there are opportunities to purchase property at reasonable prices and take advantage of some of the latest promotions being offered by lenders.
Should buyers require any assistance with loan documents after their loan has been approved, Attwood Marshall Lawyers can peruse all documents, including guarantor documents, and provide expert legal advice to ensure a smooth transaction for all parties.