- The Facts on our local property market – a Shelmark exclusive
There is no doubt that the current global health crisis has had a dramatic effect on all of us. These truly are unprecedented times. However, after four years of record low transactions in Western Australia, culminating in the lows of 2019 where there was a 55% decrease in the number of sales compared to 2005, has the impact of COVID-19 been as detrimental as the media would have us all believe?
With so many conflicting stories circulating, we have noticed a lot of confusion and uncertainty within the communities we serve. Many people who had been thinking about selling and upsizing, upgrading, relocating or rightsizing at the start of the year are now on the fence, unsure whether to sit tight and ride out the storm, however long that may take, or bite the bullet and do it now.
So we decided to do our own research and compare the weekly sales so far this year to the same weeks in 2019, based on data from the Real Estate Institute of WA (REIWA). What we found pleasantly surprised us and totally contradicted a comment left on the REIWA Facebook page by a member in March this year, ‘This virus will smash the real estate market the same as shares’. The truth is, overall, sales have been markedly higher in 2020 than they were in 2019. Sales only dropped during the first week of the year (marginally) and more significantly over the 4-week period in April when uncertainty around the impacts of the virus was at its highest in WA. Click here to view the week by week comparison figures. The numbers don’t lie. You will see that for all other weeks of the year, the number of sales achieved increased markedly (up to 88%).
We also zoomed in on markets closer to home, comparing sales in July/August 2019 with the same months in 2020 for Mount Pleasant, Applecross, Ardross and Booragoon. The results in these suburbs reflect a different story. Click here to view the data. In July/August 2020 compared to July/August 2019, sales were down 45.2% in Mount Pleasant, 33.3% in both Applecross and Ardross and 59.1% in Booragoon. This has a lot to do with the fact that there are currently far fewer properties on the market than we have seen in a very long time. If we take Booragoon as at September 5, 2020 for example, there are only 17 properties for sale, 6 of which are vacant blocks of land (not including new/off the plan apartments and retirement village properties). That leaves us with only 11 properties available to buy in a suburb of 2,224 dwellings or the equivalent of just 0.49%. It is a similar story in Applecross and Ardross, albeit to a lesser degree. These figures would usually indicate a strong seller’s market. While we wouldn’t call it a strong seller’s market right now given the continuing uncertainties of the COVID situation, other indicators, as shown below, support the view that now is a good time to sell in certain areas and price brackets.
- The Average Days on Market for the Booragoon properties that were sold in July/August 2020 was just 20.5 days.
- All the properties we have recently listed sold within a week with multiple offers received (apart from a $2,350,000 apartment in Applecross, which took a bit longer to sell but is now Sold unconditionally for the full asking price).
- Spring is historically the best selling season for residential property, as more people are out and about and gardens look their best.
- According to recent realestate.com.au figures, demand for properties for sale in WA has steadied over recent weeks but is much higher than it was a year ago.
- The rental vacancy rate has dropped from a high of 7.5% down to its current 1.6%, pushing more renters into the buyer’s market.
- Interest from first home buyers is currently high.
So, if you are sitting on the fence, this may be a good time to consider putting your property on the market. There are buyers out there and very little to sell them! Come and talk to us about the next steps.