What’s driving price growth?

AUSTRALIAN house prices have risen by 17 per cent since the start of COVID-19, representing one of the fastest growth periods for the housing marketing on record.

Ray White Chief Economist Nerida Conisbee said this extreme growth becomes even more apparent at a local area level. In some suburbs, prices have jumped by over $1 million. In the biggest capital city, Sydney, the market has never seen such a sharp increase.“This extreme price growth is however not unique and in most countries around the world, remarkably similar housing market conditions have occurred through the pandemic,” Ms Conisbee said.“Although working like we used to has been a big problem, access to money hasn’t. With record low interest rates in most countries, as well as high levels of quantitative easing, banks are flushed with cash.“In Australia, the situation is so extreme that bank CEOs have commented that they have so much cash they don’t know what to do with it and the impact on their profitability is problematic.“It’s likely that a similar situation is occurring elsewhere in the world.”Ms Conisbee identified the other main driver - locked down people don’t spend much, so savings rates have been particularly high.“While most of the world is now opening up, there are still frequent lockdowns in many of them,” she said.“Travel restrictions are also in place in many countries and this too is impacting on household spending.”FOR MORE REAL-TIME PROPERTY INSIGHTS READ THE RAY WHITE NOW REPORT HERE.

Meanwhile, Ray White auction metrics have been continued to show the strength of buyer demand despite many across the country facing extensive lockdowns. In the first week of spring, the leading group booked a 78 per cent clearance rate with 7.9 bidders registering on average nationally while 4.2 actively participated.

FIND A BREAKDOWN OF RAY WHITE’S AUCTION DATA HERE. In Sydney, online auctions will continue however the industry is fortunate enough to still be allowed private, one-on-one inspections, paving the way for some standout auctions on Saturday.Views of the iconic Sydney Harbour Bridge have impressed buyers inspecting 18/104 Lower St Georges Cres which is going to auction this weekend through Ray White Drummoyne’s Fiona Hellams. The two bedroom apartment has attracted a variety of buyers according to Ms Hellams, including younger couples and downsizers who know properties like this don’t come up often.“Buyers have loved the position looking out at the Harbour Bridge from a waterfront block and have been coming from as far as the eastern suburbs and the lower north shore because there is just nothing to choose from at the moment,” Ms Hellams said.In Sydney’s south, Ray White Caringbah principal Wendy Samrani said 313 Willarong Rd, Caringbah South (pictured above) will also be hotly contested through online auction this weekend.

In Melbourne, inspections and auctions are still taking place virtually during the city’s sixth lockdown, making it harder to transact property.First home buyers and downsizers will go head-to-head virtually on Saturday for 5 Halley Rd, Ferntree Gully. Despite private inspections being banned, Ray White Ferntree Gully agent James Wilson said it’s still a good time to go ahead with the online auction while stock is low, meaning an increase in competition from buyers.Ray White Ringwood director Chris Watson will don his lucky pinstripe auction suit again this weekend to sell 9 Parkwood Rise, Ringwood North (pictured above) under the virtual hammer. Ray White Ringwood selling agent Reuben Nadarajah said he has heard from a mix of eager buyers who are willing to buy sight unseen.“I’m mostly getting interest from upsizers who are trying to buy a premium home now because they believe the market is going to keep going up in the next two years and they don’t want to be priced out,” Mr Nadarajah.“Some other buyers are coming from other parts of Melbourne and are particularly interested in Ringwood North because of the family friendly, leafy lifestyle.“Others are locals who love the area so much that they want to stay close but can’t do a renovation to this level so they are just buying and then selling with a long settlement.”

In sunny Brisbane, Ray White Annerley agent Bevin Powell has seen a change of pace from the usual buyers with investors interested in his auction listing this weekend at 22 Chandler St, Acacia Ridge.

“Most of the buyers looking in Acacia Ridge have been investors of late, however there are a few first home buyers interested,” Mr Powell said.

“This is also one of the tidiest houses I’ve ever sold in my years as an agent. Everything works well and the house has been kept in immaculate condition so we expect a lot of competition on Saturday.”The eagerly awaited auction of 185 Westlake Drive, Westlake (pictured above) will also be going ahead this Saturday afternoon through Ray White Paddington agents Judi O’Dea and Max Hadgelias. The five bedroom home was designed and built by firm Osterfield & Johnson and boasts views of the Brisbane River, a full sized tennis court and a heated in-ground pool among other features.

Meanwhile in Adelaide where onsite auctions and open homes are allowed, top Ray White South Australia auction agent from Ray White Norwood Ryan Stapleton will continue his run of success this weekend. No. 249 Midway Rd, Elizabeth Downs (pictured above) is the perfect family home, situated on a highly sought-after 830sqm allotment which has been popular with buyers.