Spring. Traditionally the best residential property selling season of the year, much anticipated by vendors and purchasers alike as each look to escape Winter hibernation with newfound energy, enthusiasm, and optimism. But it’s 2020, the year of unexpected everything, so the big question is what’s going to happen this year?
I am not afraid to admit that I was very worried about prospects for the Spring market this year. There has been no secret to the widespread concern many have felt at the combined prospect of government financial support ending, or being reduced, and the end of mortgage repayment holidays.
But so far so good.
There is certainly less stock available for sale. The latest CoreLogic Hedonic Index shows that listing numbers have fallen by 11.5% over the four weeks in August which I think is obviously a consequence of potential vendors reacting to the commentary about a possible downturn in demand in September.
But the somewhat contrary result of that reticence to list is that demand and value for property that has come onto market continues to hold firm. Auction clearance rates continue to sit above 60%. Yes, values were slightly down again, by 0.5%, in August but that represents an easing of the contraction with growth for the year still sitting at a very healthy 9.8%.
So, I’m thinking we’re going to do okay, and I don’t think that will be by accident.
The pandemic and the economic consequences were completely unexpected, but individuals, businesses and governments adapted quickly under pressure. In comparison the risk of a September financial crunch has been extensively discussed so there has been more time to identify options. Our team have been working extensively with many of their clients over recent months to help formulate plans that will best protect their property investments in response to the change in financial supports available.
That consideration and preparation will hopefully mean there are no unexpected financial shocks in the weeks ahead. Spring might not be the bonanza it has been in years gone by but given the year we have endured I am sure we can all agree that ‘steady as she goes’ is a pretty good alternative.