Properties selling at record speeds: REA

REA Group’s REA Insights Housing Market Indicators Report for June 2021 has revealed that over May 2021, the typical property that was listed on the realestate.com.au website and sold had been on the site for 32 days.

This was down from 37 days over April 2021, and 62 days at the same time in 2020, the data showed.

According to REA Group, the 32 days on site nationally was a record low, demonstrating the strong selling conditions that are currently being experienced across Australia.

The figures also revealed that records were broken for the number of days a property was listed on site in NSW (27 days), Victoria (28 days), South Australia (43 days) and the ACT (24 days). However, increases were recorded over the month in Queensland and Western Australia, the report said.

In addition, the REA Insights research found an increase in enquiry from first home buyers (FHBs) despite the end of the federal government’s HomeBuilder scheme.

Email enquiries from FHBs increased by 12.4 per cent over May (after drifting lower in April 2021), while enquiries from all buyers (7.4 per cent) and investors (7.2 per cent) also increased, according to the data.

It showed that over May, buyers accounted for 61.7 per cent of all enquiry compared to 21.2 per cent from FHBs and 17.1 per cent from investors (who have been returning to the property market after retreating during the peak of the COVID-19 crisis in 2020).

The report said: “We continue to expect that demand from first home buyers will wane over the coming months while investor enquiry will continue to climb due to low borrowing costs, attractive yields and the potential for capital growth.”

The demand for property has increased across Australia, with the report stating that the number of views per listing for properties for sale on the realestate.com.au website increasing by 7.7 per cent over May 2021 to be 53.5 per cent higher year-on-year.

With this increase, the number of views per listing over the month was just 2.8 per cent lower than its historic peak, it said.

The largest increases in views per listing over May 2021 were recorded in the Northern Territory (18.6 per cent) and Tasmania (10.8 per cent), while the largest year-on-year increases in views per listing were in Tasmania (72.4 per cent) and NSW (62.7 per cent), and the smallest increases were in Western Australia (30.2 per cent) and the Northern Territory (32.4 per cent).

“Demand based on views per listing may moderate over the coming winter months but will remain much higher than a year ago. Demand continues to outstrip supply,” the report said.

Interest in detached dwellings continues despite dip

Houses have remained the most enquired about property type (62.1 per cent), but this is its smallest share since March 2020, while units accounted for 26.8 per cent and land accounted for 11.2 per cent, it said.

Enquiry for land recorded the biggest monthly increase (13.6 per cent), followed by units (8.2 per cent) and then houses (7.0 per cent).

Both unit (8.2 per cent) and land (2.6 per cent) rose in May 2021 compared with May 2020, while house enquiry trended lower during May 2021 (down 1.4 per cent), according to the figures.

The report also revealed that buyers are searching for more expensive properties across Australia, driven by increased household savings and low borrowing costs.

For example, nationally, 38.1 per cent of searches over the month were for properties listed for prices over $1 million, compared with 16.0 per cent for properties listed for less than $500,000.

In May 2021, 41.6 per cent of filtered searches in capital cities and 22.4 per cent in regional areas had a maximum price of at least $1 million, compared with shares of 33.5 per cent and 13.5 per cent, respectively, at the same time last year, the report said.

“However, with stimulus being removed, longer-term fixed rate mortgage costs rising and affordability deteriorating, the trend [towards] more expensive searches may slow over the coming months,” the report said.

Overall, search volumes have remained at record-high levels (17.9 per cent higher than it was a year ago) but have fallen 8.5 per cent from their peak in recent weeks, according to REA Insights.

Commenting on the findings, realestate.com.au economist Anne Flaherty said that demand outpaced supply in May, demonstrating continued property market strength.

“We are seeing properties sell at record speed, so buyers are having to move quickly to compete in these market conditions,” she said.

“While demand may moderate over the coming winter months, views per listing increased in May and is now just shy of its historic high earlier this year.”

“While search volumes for properties for sale have dropped slightly, softening supply may help to sustain above average views per listing. We do expect that the winter market will remain unseasonably active due to continued heightened demand.

“I expect prices will continue to rise over winter. However, with slightly reduced demand, stimulus removed from the market, and rises in longer-term fixed-rate mortgage rates, prices are likely to rise at a slower pace.”

Mortgage Choice shareholders vote in favour of REA takeover

Major brokerage Mortgage Choice shareholders voted in favour of the proposed acquisition of Mortgage Choice by REA Financial Services Holding Co. Pty Ltd, a wholly-owned subsidiary of REA Group.

At the scheme meeting, 98.51 per cent of shareholders voted in favour of the $244 million deal (it needed a majority of 75.00 per cent to pass).

The scheme of arrangement remains subject to a second court hearing, which will be held on Tuesday, 17 June 2021 with Mortgage Choice ceasing to trade as MOC on the ASX on 18 June.

If the court approves the scheme, it is expected that the implementation date will be 1 July 2021, on which date registered Mortgage Choice shareholders will receive a cash consideration of $1.96 per share.

The deal will see Mortgage Choice become a wholly-owned subsidiary of REA alongside franchise broking group Smartline (also owned by REA's Financial Services business), bringing the total number of brokers under the group to 900.

[Related: Refinancing overlooked by established home owners: poll]

Malavika Santhebennur is the features editor on the mortgages titles at Momentum Media.

Before joining the team in 2019, Malavika held roles with Money Management and Benchmark Media. She has been writing about financial services for the past six years.