Uncertainty created by the coronavirus pandemic has sucked the heat building in Geelong’s real estate market, but hasn’t stopped buyers from making a play for properties.
After clearance rates hovered above 80 per cent for several weeks, successful auctions slipped to 47 per cent at the weekend, according to realestate.com.au data, as the pool of active buyers diminished.
Several agents reported buyers withdrawing in the wake of the COVID-19 crisis, while the number of people attending open for inspections was up to half expected at this time of year.
Agents offered 23 properties at auction across Geelong on Saturday, with 10 selling, including at least three negotiated after being passed in.
Eleven homes were passed in on a mix of vendor and highest bids. Two results were not reported.
Buxton, Newtown director Ben Riddle said it would be difficult for prices to hold up if buyers weren’t committing.
“We’re also off the back of a really strong market. Even though the market is changing quickly, there is still remnants of that strength,” he said.
There were several strong results at the weekend but no more than two bidders at most auctions, including Belmont and Hamlyn Heights houses that sold significantly over reserve.
But a number of sales were negotiated immediately after auction and achieved a price within the price range.
Geelong’s median house price jumped 4.4 per cent in the past three months, according to Hometrack data.
“The cost of money is low, stock supply is still low, so those ingredients are still holding firm,” Mr Riddle said.
“In a short space of time we’re just finding there is slightly less people bidding on properties, and less going to open houses so I think the appetite to purchase will diminish a bit.”
The key would be how the market reacts to measures, including the extraordinary cut of interest rates, he said.
Harcourts, North Geelong director Joe Grgic said the mood changed in the 48 hours prior to Saturday’s auctions.
Mr Grgic said buyers still needed to keep an eye to the future, predicting a rush on property when the crisis passed.
That would be exacerbated as potential sellers also chose to stay off market during the crisis, he said.
First-home buyers could be the only group to remain strong, particularly those holding a 90-day spot on the Federal Government’s first-home loan guarantee scheme.
“There is still buyers out there and if they take that long-term perspective, they will be laughing (in 12 months time),” he said
“If you’re in a secure job, which not everyone is, what a time to get in. I was talking with a young couple earlier today, their interest rate will be less than the rental at the moment.”