Newcastle real estate agents are hoping a return to open houses and on-site auctions on Saturday after a six-week limited shutdown due to the coronavirus crisis brings with it some market confidence.
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The Federal Government banned open houses and public auctions on March 24 as social distancing measures were put in place to prevent the spread of COVID-19.
Listings have slowed as a result and while agents are still reporting quick sales and some good results, it is too early to tell what effect the coronavirus pandemic will have on property prices this year.
Raine & Horne Newcastle agent Patrick Collins described being able to hold open houses and on-site auctions again as "a breath of fresh air".
His agency were quick to embrace online auction platform AuctionNow with success when the restrictions came into force but was looking forward to the more traditional method of on-site auctions.
He does, however, plan to continue using the online platform in conjunction with on-site auctions to give prospective buyers another purchase option.
On Saturday, he takes a three-bedroom cottage with a guide of $600,000 at 1 Kings Road in Tighes Hill to auction on site and was expecting a positive result.
While open homes have been on hold, agents have told the Newcastle Herald there has been more genuine buyers but Mr Collins reported "a spike in enquiries" in the past week.
"I think people have come to the conclusion that this is the way it's going to be for a little while," Mr Collins said.
"At the end of March/early April, it sort of all really died down. That's when the restrictions were put in. But that end of April/early May, where we are today, it's definitely picked up. We've definitely seen a noticeable increase, which is fantastic.
"Prices have definitely stayed quite buoyant as well due to the fact of there being very limited properties on the market, and there's been not much to choose from even with limited buyers in the market ... that's really keeping those prices stable.
"But what happens in the next three to six months is unknown."
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Data compiled for the Domain House Price Report for the March quarter and released last month showed slight year-on-year growth for the local government areas of Newcastle, Lake Macquarie, Port Stephens and Maitland.
Newcastle experienced year-on-year growth of 0.8 per cent for houses with the median sale price rising from $610,000 in March 2019 to $615,000 in March this year. Growth in a five-year period to March for Newcastle was 30.9 per cent with the median house sale price $470,000 in March 2015.
The median sale price for units in Newcastle rose from $511,500 in March last year to $522,250 in March this year, showing year-on-year growth of 0.7 per cent.
At the start of 2019 the Australian property market was in freefall but picked up towards the end of the year and agents were reporting a strong start to 2020 for the Newcastle market.
The quarter-on-quarter growth for Newcastle LGA, from December of last year until November, was 2.5 per cent, according to the Domain report, with the median house sale price for Newcastle in December $600,000.
In Lake Macquarie, the median sale price for houses in March this year was $600,000 and up three per cent from $582,750 from March last year. In March 2015, it was $454,000, showing growth of 32.2 per cent in a five-year period.
Port Stephens experienced year-on-year growth of 7.2 per cent for the median house price, rising from $559,000 in March last year to $599,000. Five-year growth was recorded at 42.6 per cent with the median house price in March 2015 being $420,000.
Maitland had year-on-year growth of 5.2 per cent for houses. The median sale price in March last year was $480,000 compared to $505,000 in March this year. It was $383,000 in March of 2015, showing growth of 31.9 per cent in the five-year period.
While for most of 2019, the Newcastle region property market experienced a downturn, there were also some of the biggest sales ever recorded.
The highest was a Bar Beach suburb record of $5.525 million paid in October for 16 Bar Beach Avenue.
That month a suburb record $1.6 million result was recorded in Adamstown for 9B Ella Street. That was surpassed in March this year with the $1.61 million auction sale of 71 Lockyer Street.
In December, a new suburb ceiling of $933,000 was set for Cameron Park . In November, Fletcher rose to a new high of $1.21 million while Warners Bay broke the $2 million mark with the $2.15 million exchange of a waterfront residence on The Esplanade. In September, $2.175 million was paid off market for a 5685 square metre "lifestyle" property in Grinsell Street, setting a new suburb record for Kotara.
This year, new suburb records have also been recorded in Tighes Hill ($1.5 million in March), Belmont ($4.25 million in January), Elermore Vale (an undisclosed sum believed to be over $2 million in February), New Lambton ($3.86 million in February) and Salamander Bay ($4.775 million in January).
Domain senior research analyst Dr Nicola Powell said this time last year Newcastle was recording negative growth, and the latest Domain House Price Report showed "an improvement in the rate of growth compared to last year".
"We know that Newcastle reacts to what's happening in Sydney," Dr Powell said. "It's kind of this lagged effect in the Newcastle market, so this time last year Newcastle was in a little bit of a downturn. It was minor in terms of the annual declines that were being recorded, but we're certainly seeing an improvement this period compared to last year.
"Over the last year we've seen interest rates cut multiple times and we've seen improvement in borrower capacity because of that and we've seen a relaxing of lending standards, which I think has helped bring buyers back into the market and has helped to push prices higher."
Dr Powell said the impact of COVID-19 had not yet played out in prices in the Newcastle market but had affected listings.
"It was almost like a switch that happened later in March and that really aligns to the shutdown of non-essential services and the ban on open homes," Dr Powell said.
"So we've seen a slowdown in listings and a slowdown in new sellers coming to the market and I think that really shows that sellers are being cautious around their decisions of whether to sell their property or not.
"We're likely to see fewer buyers come to the market, so the two things should help to balance out one another because I think the big question is what is going to happen to price.
"We're seeing growth at the moment but is that going to continue? Prior to COVID, I would've said Newcastle was going into its next growth phase, but it's that big question mark of what are going to be the effects of COVID. I think transactions are going to slow.
"I think the good thing that we've seen coming from government and the banks is the JobKeeper subsidies should mean it will keep more people in a wage. And also we have the ability to take mortgage holidays for six months. We can pause that mortgage. I think without that ability to pause our mortgage we would see more forced sales ... it's almost like a safety net. It should help to support prices during this really uncertain period that we're going through."
Dr Powell said real estate agents had become "more important than ever" during the past six weeks when homes could only be viewed by private one-on-one inspections under strict conditions.
She suggested abolishing stamp duty could be a way to help the property sector navigate their way through the effects of coronavirus.
The NSW Government announced last Sunday that agents and vendors were able to hold traditional property inspections and on-site auctions again but were advised to limit the number of people viewing a property and to follow stringent cleaning and safety guidelines.
Treasurer Dominic Perrottet and Minister for Health Brad Hazzard said the relaxing of restrictions was a sign of the ongoing success in limiting the spread of COVID-19, but warned there was no place for complacency, with social distancing to remain an ongoing priority.
"Choosing a home is one of the biggest decisions anybody makes, and easing the restrictions to ensure people can more easily inspect, buy or rent a property is an important step for NSW," Mr Perrottet said.
"The real estate industry has been adaptable in transitioning to online auctions, property inspections by appointment or online, and now as we make the move back to a more normal mode of operation we must ensure safety measures such as social distancing remain a key part of the process."
