The latest property report paints a tale of two markets – but there’s reason for optimism in some areas.
It’s unlikely that anyone would have predicted a relatively buoyant property market in the midst of a global pandemic but, with the exception of Victoria, that’s exactly what we’re seeing. This is prompting some retirees to consider their next move.
A tale of two markets
It’s important to look at the real estate market from a state-based perspective. In a nutshell, it’s a tale of two markets – a slow property market in Melbourne (and Sydney to a much lesser extent) and much more buoyancy elsewhere. According to the latest CoreLogic data, transaction activity – or the number of properties marketed and sold – slowed significantly in response to COVID-19 restrictions. However, this has less to do with property prices themselves, and much more to do with the flow-on effects of the restrictions, such as lower employment, a decline in consumer confidence and border closures.
Let’s look at the numbers to see how this played out from late July to late August. While Melbourne listings dipped by more than 50% and Sydney listings slowed slightly, it was a different story elsewhere. Most other capital cities saw an increase in new listings, buoyed by greater levels of consumer confidence and fewer COVID-19 cases in those communities.
Monthly change in new listings to 23 August 2020:
- Darwin +16.7%
- Canberra +10.5%
- Hobart +6.8%
- Adelaide +2.4%
- Brisbane +2.3%
- Perth +1.2%
- Sydney -1.9%
- Melbourne -54.9%
How does this translate to retirement villages?
For Paul McAlpine, RetireAustralia’s General Manager of Sales and Marketing, these numbers aren’t surprising. Having worked in the property sector for more than 20 years, across both residential land sales and retirement living, Paul has seen his share of turbulent times – including the impact of the Global Financial Crisis on property prices.
“Unfortunately, Melbourne has been the epicentre of COVID-19 cases in Australia. This has had far-reaching economic impacts for the state, one of which is a downturn in its property market. However, this sentiment doesn’t translate across the country.
“Prices in many areas have remained strong, particularly in regional pockets, where some properties are selling for well above the listed price. That’s because areas with low to no community transmission have been able to continue as normal with property inspections and valuations.
“The relative stability in other states means that we’re seeing strong interest in our retirement villages across Queensland, New South Wales and South Australia. Based on conversations with our Village Managers and new residents, we largely put this down to older Australians wanting to live independently, but with the safety and security of community living.”
Sell or wait?
As for what’s a good time to sell? “It’s impossible to predict what the market will do next, but there are strong signs outside Victoria,” said Paul. “Sydney just reported its busiest week for auctions since April and the national auction clearance rate was just a couple of percentage points off the rate 12 months ago.
“I think vendors should gain some confidence from the degree of market buoyancy in many parts of Australia. Consumer confidence is increasing and now might be the right time to consider making a move. I suggest doing your research and checking out sales in your area to gauge the strength and stability of your local market.”
Live free for a year
“It’s no understatement to say that this year, we’ve seen the importance of community more than ever,” said Paul. “However, some older Australians might be concerned about financial uncertainty on top of economic instability.
“To alleviate this concern, we’re waiving all village fees for a year if you deposit on a new home before September 30. This gives our new residents a sense of security around finances, as well as the security of living in a welcoming community.”