Vendors Rush to Market Ahead of Covid-19 Lockdown

Vendors rushed to sell properties ahead of auctions slated for last weekend after the announcement of a temporary lockdown across the already depressed market of Melbourne.

Almost 50 per cent of properties were sold ahead of auction, boosting Melbourne’s auction clearance rates.

This was about double the normal rate of properties sold before auction, according to Corelogic data.

More than 1200 properties went to auction last weekend and, despite lockdowns, 72.8 per cent of properties in the city were sold, a minor drop from 77.6 per cent the previous week.

The city’s retailers have not been so lucky with ANZ reporting a 49 per cent drop in spending since the lockdown began last week.

ANZ economist Adelaide Trimbell said dining and shopping were the most affected areas, dropping 60 per cent and 67 per cent between May 28 and 30, compared to the previous week.

“The experience from other snap lockdowns is that spending recovers very quickly as things open up,” she said.

“This lockdown will be the first lengthy one without JobKeeper, however, so we need to be a bit more cautious about how the recovery may look.”

Corelogic’s latest housing markets data showed the national Home Value Index was up 2.2 per cent, a stronger result compared to April’s 1.8 per cent rise.

But according to Corelogic research director Tim Lawless, Melbourne continues to be one of the weakest housing markets with a growth of just 5 per cent during the past 12 months.

“The extended lockdown has created a more significant drag on the annual rate of growth,” he said.

“[Elsewhere] the combination of improving economic conditions and low interest rates is continuing to support consumer confidence which, in turn has created persistently strong demand for housing.

“At the same time advertised supply remains well below average … this imbalance between demand and supply is continuing to create urgency among buyers, contributing to the upwards pressure on housing prices.”

Lawless said it was the most expensive end of the market that was driving the highest rate of price appreciation across most of the capital cities.