Auction Clearance Rates Rise, As Confidence Starts to Return
As the government puts plans into progress to get our economy and lives back to a new normal, listings are set to rise significantly over the coming weeks as more vendors are making plans to put their homes on the market. This is great news for our industry, but also for recovering housing and consumer confidence.
In a recent report by CoreLogic, the data showed a clear indication that pre-listing activity was on the rise, jumping by 10.6 per cent over the past week. This activity is measured by the amount of comparable market analysis (CMA) reports generated for pre-list sales kits.
This metric has long been considered a leading indicator of new for sale listings volume, as agents collate individual property and market trends, often to prepare a home for sale, and set an expectation around pricing.
“This is great news, and is clearly showing positive signs that vendors are keen to engage the services of agents and industry data once again as part of the appraisal process. We’re starting to see confidence coming back, and much needed momentum building as our industry starts to bounce back.” said Anna Thomas CEO of Stockdale & Leggo.
CoreLogic's research analyst Eliza Owen stated that the rise in CMA reporting is strongly suggesting more listings are coming to market.
"With restrictions on open inspections and auctions being gradually lifted, agents may find they have capacity to take on more listings," she said.
"For example, having more people through a house can allow viewing on individual properties to take less time.
"Even though consumer sentiment is relatively low, it has bounced back significantly over the past few weeks, with May results of consumer sentiment regaining 80 per cent of what was lost in the index over March.
"For now, it would seem that people are more confident in selling property."
During the past seven days, newly listed homes climbed by 11.85 per cent while mortgage activity rose by 2.78 per cent compared to the previous week, a further sign of improving sentiment, said Ms Owen.
"This shows that confidence is returning to market off the back of eased social distancing restrictions, and government policies which have helped to soften the blow of a negative shock to demand," she said.
"This improvement to consumer sentiment is likely flowing through to some upside for housing markets."
Consumer expectations for house prices has also risen 4.6 per cent, not an overly large increase, but heading in the right direction at least. A much-needed turnaround from the extremely dire drop of 50 per cent in April.
The rising positive sentiment and sales activity is a clear reflection of eased social distancing measures, supported by government incentives like the JobKeeper and JobSeeker payments.
"The real test for the housing market will be in late September, once lenders lift their repayment leniency policies," she said.
In summary, whilst statistics are providing us with real value on percentage changes in buyer and vendor confidence, it will depend heavily on the employment and economic conditions over the coming months. These economic shifts will help remove any home value pressure, and bring about home value stability and general consumer confidence across all industries.
Watch this space…