Summer selling season?

Melburnians have been in Stage Four lockdown since 3 August.

Many industry categories have been completely shut down and as such, some businesses have been grounded during this time.

Specifically, the restrictions on the real estate industry have completely halted all campaign inspections. The only permitted activity has been in relation to contractual final inspections for both leasing and property settlements.

Agent selling activity has, more or less stopped completely.

Our State Premier mapped out our ‘roadmap’ to recovery on Father’s Day. The critical dates for each restriction stage are based on case numbers, not specific dates. However, the forecasted dates have been nominated as such;

The challenge we all face relates to new COVID-19 case numbers recorded. The stage-gates above are contingent on case numbers reaching a target-low, based on a fourteen day, rolling average.

For example, since our Premier’s announcement seven days ago, our COVID-19 case numbers have been consistently falling in both regional Victoria and metro Melbourne and the fourteen day average is still in the sixties, despite us now hovering around case numbers per day of ~40.

Provided Melbourne’s new case rates average less than five by 26 November, real estate agents will be permitted to facilitate strictly conducted, one-on-one buyer inspections.

This is where it gets interesting when we look at our Spring market timeline….

Our Spring market has always commenced with gusto at the start of September, the first round of four-week auction campaigns being launched at this time. Typically, these vendors are ready for auction day action in line with the end of the AFL season.

Once the footy is out of the way, vendors can enjoy a strong run to the Spring selling season finish line, marked by Christmas break shutdown.

The only break that agents, vendors and buyers are granted in this busy season is Melbourne Cup weekend.

This year, however we won’t be celebrating any Spring Carnival or Grand Final in our, (once renowned) party city.

What this will mean for the real estate sector is a property selling season like none we have ever experienced.

This updated calendar shows what the adjusted Spring selling season will likely be, contingent on our case numbers*.

Red denotes no activity. We’re in complete and total lockdown.

Green denotes restricted but permitted public open for inspections and auctions. No doubt we will face maximum number limitations as we did earlier in the year, and online auction platforms will be utilised well.

Orange denotes restricted, one-on-one buyer appointments only.

It is fair to say that our selling agents will be busier than they have ever been, managing high, pent-up buyer demand, and a large number of emerging vendors in a condensed timeframe, all amplified by the sheer difficulty of managing one-on-one inspections.

It will be particularly difficult to coordinate this, but agents have become very nimble and firm with their ability to abide by these strict rules and I have no doubt that they’ll manage it well.

We can anticipate strict adherence to booked inspection times.

This will most likely involve online booking platforms, strict, ten-minute inspections and limitations to buyers being offered repeat inspections, (purely as a result of agents having to manage such a huge number of private inspections in a controlled manner with full PPE and hand sanitiser issued for each inspecting buyer).

Buyers can prepare themselves optimally to make the most of their ten minute opportunity;

What the calendar above shows is an insufficient timeframe for the anticipated Spring auction volumes. Despite the fact that listing numbers will be lower than recent past Spring seasons, we still have a reasonable pipeline of committed vendors who are selling for various reasons, ie. moving away, children commencing school in a new area, down-sizing, upgrading, reducing debt levels, and so on.

The agents will have a considerable number of vendors to accommodate, and in a very restricted way.

With only five likely available weekends of auctions until Christmas day, I predict the following quirky changes for our Melbourne spring market;

• Shorter campaigns for vendors once Step 4 is reached, (forecast date 23 November). Agents will likely run multiple OFI’s (open for inspections) each week into December and condense the typical campaign timeline to 2 weeks,
• No ‘gap’ or weekend off for agents and auctions over the Melbourne Cup weekend,
• More agent-marketed campaigns will be evident, (as opposed to online, search engine advertising). With restrictions on buyer inspection numbers due to COVID-19, vendors will be happier to rely on agents fielding and shortlisting the right buyers to show through their property, particularly during October and November.
• Sales pushing out into January. This summer is likely to spell a season of work, as opposed to a season of holiday. Our overseas plans are on hold, state border closure is questionable, and agents haven’t been making an income to fund a holiday.
  I predict our holiday expenditure will be subdued, and holidays taken will be shorter
• Vendors will be open to January campaigns for the same reasons as agents will, (above).

We can anticipate a Summer selling season in 2020.