By Tarric Brooker
As the normal hustle and bustle of life ground to a halt during the lockdowns earlier in the year, many Australians found themselves reassessing their priorities in life. During the weeks or even months stuck inside, people began dreaming of what might be possible.
For many, it was the realisation that living close to the CBD was perhaps no longer necessary.
With things finally beginning to return to normal and border closures slowly being lifted, many Aussies are looking forward to putting the changes they dreamt of into action.
Amid a year of pandemic and economic driven uncertainty, some homeowners quite understandably held off on listing their properties, hoping that the New Year may provide more ideal circumstances for a sale.
According to data from research firm Digital Finance Analytics (DFA), these two forces appear to be combining to create a wave of homeowners looking to change their living arrangements in the next six months.
DFA’s survey data concluded that over 1.1 million Australians intend to sell their property in the next six months. In terms of the demographics, 298,093 international owners (foreign citizens and Australians living overseas), 309,032 investors, 115,893 up traders, 350,093 down traders and 28,003 first home buyers intend to sell in the coming six months.
While it’s likely that not all surveyed intending to sell will take the plunge and put their property on the market, the increase in the number of homeowners looking to sell compared with 2019 has been significant.
In 2019 the same survey showed that just 337,000 people intended to sell their property in the next six months.
This 226 per cent increase could potentially represent a seismic shift in the balance of supply and demand within the property market. This effect could be particularly notable in some cities, such as Sydney and Melbourne that already have historically high levels of stock on the market.
According to data from SQM Research the total stock on market in Melbourne is currently at its highest level in six years for this time of year.
It’s a similar story for Sydney. Stock levels are currently quite high and similar to the decade high for this time of year back in 2018.
In 2019, DFA’s data showed there were 3.69 people intending to buy a property in the next six months for each one who intended to sell. In the aftermath of the pandemic, that has now completely flipped, with 2.15 people intending to sell for each one intending to buy.
Last year, overall net demand for property (people looking to buy minus those looking to sell) was slightly over 907,000 homes.
Now amid changing priorities net demand for property in the coming six months was -589,580 homes.
As people increasingly look back toward the freestanding family home as a bastion of security in this new world of priorities, this is also being picked up in the data.
Going forward, net demand for units in the coming six months was -676,372 homes, compared with extremely strong net demand of 577,454 in 2019.
For homeowners in a freestanding house, the news was rosier, with net demand for 86,792 homes, but still down 73 per cent when compared with 2019.
With so many Australians looking to change their living arrangements in the New Year, whether it’s a sea change, tree change, upsizing or downsizing, this potential increase in the supply of properties on the market may prove a challenge for the nation’s property markets.
As you might imagine, not all states are equal as people reassess where it is they desire to live.
DFA’s data showed almost 9000 people in New South Wales and around 14,200 Victorians were planning to move interstate in the next 12 months to Queensland, South Australia, Tasmania and Western Australia.
The number one destination for people from both states was Queensland, with 12,587 planning to move up north, followed by Western Australia with 6788 looking to go west.
In recent months the major banks have flipped their housing price forecasts from predicting price falls, to now predicting prices to rise and – in some cities – roar ahead in the New Year.
Given the uncertainties that lay ahead, any form of economic forecasting has proven challenging to say the least. For several years now the nation has seen multi-decade low levels of property transactions, with turnover at almost half the level of decade highs back in 2014/2015.
Now with DFA’s data indicating that 2021 may be the year Australians decide to make the big move, the property market may face yet another challenge.
This comes amid an already long list of headwinds that experts warn may impact the market in the New Year, such as negative net migration and the conclusion the insolvency moratorium and JobKeeper.
2021 is shaping up to be a transformative year for the nation, with property transactions to potentially spike to decade highs as up to 1.1 million Australians make their big move in the early months of the year alone.
Knowing how this will impact the property market remains a question for those with a reliable crystal ball. But there are some things we know with a little bit more certainty.
Houses will likely be in far greater demand over units and there will be vast differences between how the big move of 2021 impacts prices in different suburbs and states.
Ultimately, as people pursue their dreams of a life that better suits their new priorities, a very different view of what matters to Australian property buyers may emerge as we head into the future.
Tarric Brooker is a freelance journalist and social commentator |