Low supply and high demand during the COVID-19 pandemic has seen property sale times almost halve in many regions, with desperate buyers willing to overlook shortcomings that might previously have been deal breakers in order to secure a property.
According to CoreLogic figures, days on market have been contracting across several popular tree or sea change locations since the pandemic hit in March 2020.
"On average, days on market across these popular tree change and sea change markets pretty well halved between the March 2020 quarter and the three months to July 2021, marking a strong lift in demand since the onset of the pandemic, as well as a shortage of listings resulting from less people leaving regional Australia amid lockdown periods," CoreLogic head of research, Eliza Owen said.
In the Richmond-Tweed region, home to popular lifestyle hotspot Byron Bay, days on market dipped from 56 at the end of March 2020 to 29 at the end of June this year.
In the Illawarra region, home to Wollongong and surrounds, the change was even more pronounced with the time a property spent on market falling from 40 to 20 days.
Markets where supply was particularly constrained recorded the fastest selling times, Ms Owen said.
"Perhaps unsurprisingly, the locations with the shortest time taken to sell property through the June quarter were in the most desirable regions like Richmond Tweed, and regions that are constrained in terms of supply, namely the Launceston and North East of Tasmania," she said.
Days on market fell from 21 to 15 in Launceston and North East Tasmania.
"In the three months to July, there were just 1,124 properties counted for sale across the Launceston and North East region, which was the second lowest stock level of the regions observed (behind 1,020 listings across the Warrnambool and South West region)."
Buyers overlooking shortcomings in scramble to buy
Raine and Horne executive chairman Angus Raine said that the scramble to secure a property during the pandemic meant that buyers were willing to overlook what would traditionally be thought of as deal breakers when it came to the type of property being purchased.
"Every property has features that will appeal to buyers. However, some houses and apartments in regional Australia and even our capital cities may tick fewer boxes based on size, style and location," said Mr Raine.
"It might be that an apartment has no parking or balcony, it's a tiny bedsit, or it's a house located on a main road or across from a railway line," he added.
While these factors might typically make a property difficult to shift, they were selling "weeks faster" in the current market.
"A bull market smooths out the detractors and gets properties moving.
Matthew Ivanoff, Principal of Raine & Horne Wollongong, said this phenomenon was on full display in his market, with an "exodus of buyer from Sydney" leading an increased willingness to accept compromised properties.
"Apartments without balconies or houses on busy roads are selling in days rather than weeks," said Mr Ivanoff.
He sold a four bedroom property on a battle-axe block 3a Cadigan Place, Dapto in July for $760,000 - $100,000 above expectations.
"Properties at the back of a battle-axe block can be challenging to move faster in softer markets as it has no direct street access. But not in this market," Mr Ivanhoff said.
Older-style, small regional units were also proving a surprise hit in the current market, according to Bryan Bolitho, Principal of Raine & Horne Tamworth.
He recently listed a block of three one-bedroom villas at 77 King Street, Tamworth via an expressions of interest campaign.
"These are fibro and corrugated iron cladding units, and 12 months ago, we wouldn't have had any interest in these units," Mr Bolitho said.
"Within days, we've had three private inspections and a Facetime video inspection with an investor from Sydney. We also received 30 email enquiries within two days of the property listing."
Tide may be turning
Sellers and agents should anticipate an increase in sale times as more stock comes onto the market following the end of lockdowns in most states, Ms Owen said.
"Across Newcastle and Wollongong for example, there has been a relatively strong uplift in listings in the past few weeks, which may offer slight reprieve for buyers in terms of choice of stock and competition," she said.
Mr Raine said that the looming threat of further lending interventions from the regulator, APRA, could also slow the market and lead to increased sale times.
"This situation won't last forever, and with talk that the banking regulator might pull the reins further with more borrowing limits, it's time for regional owners considering a sale to make a move," he said.