1 © 2021 CoreLogic, Inc. All Rights Reserved.

The housing market through pandemic lockdownsAustralia | Released July 2021

Data to June 2021

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As the delta variant of COVID-19 has spread in Australia, Greater Sydney will soon

enter a third week of lockdown. With a low vaccination rate, and slow vaccine

distribution, temporary, pandemic-induced lockdowns may continue to be a norm

for Australians through 2021.

This note highlights trends that emerged from the housing market amid COVID-19-

induced lockdowns over the past 15 months, which might inform our expectations as

to how the housing market is affected. The report covers several key trends:

Auction results across Sydney and Melbourne are considered in lockdown

conditions. The proportion of sold properties remained relatively resilient,

particularly through circuit-breaker lockdowns, although a larger than normal

number of auctions are typically withdrawn, postponed or sold prior to the

auction event during these periods;

Transaction activity slows markedly through lockdown periods, however a ‘catch

up’ in home purchases is evident as restrictions ease;

Property values have remained resilient through lockdowns, and have seen strong

growth as social distancing restrictions eased; and,

The stability of housing market values is likely subject to extensive government

stimulus and institutional support for the sector; a factor which is far less certain

going forward.

How does the housing market react to pandemic lockdowns?

Introduction

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Auction outcomes have gradually become more favourable to

sellers through lockdown. This is seen across Sydney and

Melbourne auction results over time (Sydney and Melbourne are

the key focus for this analysis, as these markets have comprised

approximately 85% of all capital city auctions held since the

beginning of 2020).

Figures 1 to 4 show the outcomes in Melbourne and Sydney for

all auctions collected by CoreLogic under different social

distancing conditions, as well as the average weekly volume of

auctions through each period.

The columns on the far left of each chart shows 5 years’ worth of

auction results before the onset of COVID-19, as well as auction

results through various periods of restrictions since. A few

observations can be made from the data:

Longer social distancing periods had far lower average

auction volumes. This is presumably a result of vendors and

real agents being more selective about the kinds of

properties they were confident in taking to auction. This is

also reflected in lower rates of properties ‘passing in’, along

with a larger number of cancelled or postponed auctions. The

cancellation of auctions may reflect agents only auctioning

properties during lockdown that they are confident will sell.

Across Melbourne, auction volumes were most depleted

toward the tail-end of stage 4 restrictions, through

September and October 2020. This was partly because

property was harder to sell amid rules limiting physical home

inspections and on-site auctions. Additionally, an extended

economic downturn across the state, and falling property

prices, made selling conditions more challenging.

More properties are withdrawn through lockdowns. As

well as lower numbers of properties listed with an auction

campaign, a higher portion of properties were withdrawn

from auction altogether in periods of lockdown, either

transitioning to private treaty listings, or a pause in the

campaign. Relative to the previous 5 years, the portion of

withdrawn auctions has remained elevated in Melbourne,

and were somewhat elevated in stage 2 restrictions across

Sydney. For Melbourne, the proportion of auctions

withdrawn became smaller with each lockdown. Withdrawn

properties are counted as an unsuccessful auction result, and

as such have weighed on the clearance rate, even as a lower

portion of properties had a passed in result.

Fig. 1 Melbourne auction outcomes through COVID-19 restrictions

Fig. 2 Melbourne - average weekly auction volumes amid COVID-19 restrictions

27.8%

11.3% 12.6%4.1% 6.9%

1.3%

1.9% 2.1%

2.2% 1.7%

55.3%

9.0%

20.8% 36.2% 32.1%

12.9%

23.4%

26.7%

32.2% 34.3%

2.7%

54.3%

37.8%25.3% 25.0%

Series average

(Pre-COVID19)

Stage 2

restrictions

Stage 3 and 4

restrictions

Circuit Breaker -

Mid February

2021

Circuit Breaker -

start of June

2021

Passed In Sold After Sold At Sold Prior Withdrawn

805

576

207

633

1,156

Series average

(Pre-COVID19)

Stage 2

restrictions

Stage 3 and 4

restrictions

Circuit Breaker -

Mid February

2021

Circuit Breaker -

start of June

2021

Auction results have generally improved with each lockdown

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• A higher portion of properties sold prior and sold after

auction during lockdown. For Sydney, the proportion of

properties sold prior to auction increased from 23.1% over

the past 5 years, to 28.0% during stage 2 restrictions, and

35.2% for the two weeks ending 4th of July. Across Melbourne,

the portion of properties sold prior to auction also increased

with each lockdown. Agents may have adapted to getting

deals done prior to planned auctions, which may have

become easier as property market conditions began to

recover from October 2020.

More properties were also selling after the auction event

during lockdown than the historic average, which again could

be a function of the recovery in the market from October

2020, where auctions were more likely to eventually sell than

pass in.

Circuit-breaker lockdowns saw a higher portion of

properties sold ‘at’ auction than longer restrictive

periods. Across both Melbourne and Sydney, shorter

lockdown periods have seen a higher portion of properties

sell ‘at’ auction, as agencies have adopted and refined online

or over-the-phone methods of hosting auctions. Many real

estate agents are now running both physical and online

auction formats in parallel, making it easier for prospective

buyers to participate in the auction event should restrictions

be implemented. Buyers may also have become more adept

with these formats. However, it is hard to separate the

success of these online formats, with the fact that circuit-

breaker lockdowns have coincided with periods of much

stronger housing market demand.

For the two weeks ending 4th of July, Sydney has seen 74.6% of

scheduled auctions achieve a successful result. This was slightly

lower than the previous week ending 20th of June, when 76.8% of

auctions saw a successful result, and below the previous 5 year

period, where 77.2% of results have been successful.

Of the Sydney auctions that cleared through the past two weeks,

36.3% sold at auction, while 35.2% were negotiated prior.

Withdrawn auctions, which are counted as an unsuccessful

auction result, represented 14.5% of auction outcomes for the

week.

For the week ending July 11th, Sydney is expected to see

relatively low auction volumes at 797 properties scheduled.

However, the clearance rate is likely to be buoyed by a higher

portion of properties selling prior to auction, and a pivot to

virtual auctions. With agents finding ways to navigate the auction

market amid social distancing restrictions, the clearance rate is

more likely to reflect market sentiment than be directly impacted

by a shorter term lockdown.

Fig. 3 Sydney auction outcomes through COVID-19 restrictions

Fig. 4 Sydney - average weekly auction volumes amid COVID-19 restrictions

22.0% 24.0%

10.9%

0.8%1.9%

3.1%

44.1%32.3%

36.3%

23.1%

28.0%35.2%

10.0% 13.7% 14.5%

Series average (Pre-

COVID19)

Stage 2 restrictions Sydney lockdown - June /

July 2021

Passed In Sold After Sold At Sold Prior Withdrawn

642

553

916

Series average (Pre-

COVID19)

Stage 2 restrictions Sydney lockdown - June /

July 2021

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Through lockdowns, transaction activity has been far more

volatile than sales values. From March to April of 2020, which

coincided with the onset of stage 2 restrictions nationally, the

volume of sales fell -33.9% across the country.

The enormous decline in the number of sales was not only

because properties became more difficult to purchase. The initial

economic shock caused by COVID-19 lockdowns may have

lowered price growth expectations and pessimism around real

estate performance. This was reflected in the monthly ‘time to

buy a dwelling’ index, a sub-component of the consumer

sentiment index produced by Westpac and the Melbourne

Institute, which fell -26.6% in the month of April 2020.

This sentiment was not helped by initial expectations for the

property market, where consensus among banks was building

that national property values could fall 10%, and worst-case

scenarios suggested prices could fall by a third.

Ordinarily, such a sudden fall in demand would see greater

vendor discounting and a fall in property prices. Instead

however, new advertised supply also fell. New listings added to

the market declined -44.7% through the month of April 2020.

While it is true that home buying activity takes a hit during

lockdowns, it is important to note that listings activity also

declines, as home owners recognise lockdowns are not ideal

times to sell. As noted in our initial response to the onset of

COVID-19, we expected lockdown conditions to resemble

‘holiday periods’, where both buyers and sellers step back from

buying and selling decisions.

However, it is worth noting that listings levels have largely

remained subdued, even as restrictions have lifted, and COVID-19

case numbers have remained relatively low. This is

demonstrated in figure 5, which shows the national, rolling 28-

day count of new listings through 2020, compared with the

previous, five year average.

Fig. 5 Rolling 28-day count of new listings advertised for sale, National

Demand declined during lockdowns, but so did advertised supply

0

10,000

20,000

30,000

40,000

50,000

60,000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

5-year average (2015-2019) 2020 2021

National Stage 2 restrictions

Melbourne stage 3 and 4 restrictions

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Extended lockdowns, both nationally and across Melbourne, saw

very subdued listings activity. It was not until 2021 that new

listings added to the market have trended closer to the historic

average. Even so, new listings added to the market currently still

do not match levels of demand. Through 2021, as housing

demand surged in recovery from COVID-19 lockdowns, CoreLogic

has observed a greater volume of sales than new listings added

to the market. This has resulted in an especially low level of total

advertised stock, where the total volume of listings across

Australia is currently 139,897. The previous 5 year average level

of total stock for this time of year is 201,442.

In shorter, circuit breaker periods of strict social distancing,

vendor activity becomes temporarily subdued, but then seems to

resume swiftly as lockdowns are lifted. This is shown in the

indices across figure 6.

Each index tracks a rolling, seven-day count of ‘Comparative

Market Analysis’ reports (CMA reports) generated by real estate

agents using the RP Professional platform. This has proved to be

a leading indicator of new listings activity, because these reports

are used by agents to research property and pitch for new

listings.

Looking at the index for South Australia, CMA activity saw a

decline of -42.4% from the 12th of November to the 22nd of

November, as Adelaide went into a three day lockdown. CMA

activity can back swiftly. Although report volumes did not see a

full recovery within one week of the lockdown lifting, this is likely

because it coincided with a seasonal decline in transaction

activity, which regularly occurs toward the end of the year.

Looking at Victorian CMA activity through Melbourne’s circuit

breaker lockdown (between the 13th and 17th of February 2021),

the volume of CMAs generated had seen full recovery in report

volumes within one week of the lockdown lifting.

Interestingly, the decline in CMA generations has not been as

severe across NSW as of yet. Since the start of the Sydney-wide

lockdown, the rolling seven-day count of CMAS has fallen -10.1%

through to the 6th of July, potentially reflecting that fact that

private property inspections are permitted under the social

distancing rules. CMA activity may fall further as the lockdown is

extended to the 16th of July.

Fig. 6a Index of CMA volumes, SA (indexed to 1 on the 12th of November, 2020)

Fig. 6b Index of CMA volumes, Victoria (indexed to 1 on the 6th of February, 2021)

Fig. 6c Index of CMA volumes, NSW (indexed to 1 on the 19th of June, 2021)

0

0.2

0.4

0.6

0.8

1

1.2

12 N

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Adelaide lockdown

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Melbourne lockdown

0

0.2

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19 J

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01 J

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05 J

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1

06 J

ul 2

1

Sydney lockdown begins

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One of the extraordinary elements of housing market

performance in recent months has been strong sales volumes. In

the 2020-21 financial year, CoreLogic estimates there were

approximately 582,900 transactions nationally, compared to a

decade average annual volume of 455,346. This is the highest

annual sales volume observed since February 2004.

In the context of closed international borders, it is perhaps

difficult to fathom where the additional demand has come from.

Arguably, demand among first home buyers, which

demographically are currently in very high numbers, has been

brought forward due to various government incentives such as

the first home loan deposit scheme, HomeBuilder and various

other state-based grants and stamp duty discounts.

Record low mortgage rates have also been a key factor in stoking

housing demand, potentially spurring pent-up demand from

prospective buyers who would have otherwise remained

inactive.

Another source of housing demand in the past 12 months may

well be the sales that were postponed, or made more difficult,

through the first half of 2020 due to COVID-19 restrictions.

Figure 7 shows dwelling sales volumes nationally through 2020,

with the exception of Victoria, where lockdowns extended and

further impacted sales volumes in the second half of 2020.

Outside of Victoria, there is a clear asymmetry in sales volumes in

the first and second half of 2020, which is not as pronounced in

the average monthly sales volumes over the previous 5 years.

Sales volumes fell -10.1% between February and March 2020,

where the 5 year average shows sales volumes would typically

increase 12.2% around this time of year.

Fig. 7 Monthly sales volumes, national excluding Victoria

Lockdowns were followed by ‘catch up’ dwelling purchases

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

Jan

uar

y

Feb

ruar

y

Mar

ch

Ap

ril

May

Jun

e

July

Au

gust

Sep

tem

ber

Oct

ob

er

No

vem

ber

Dec

emb

er

2020 Previous 5 year Average

8 © 2021 CoreLogic, Inc. All Rights Reserved.8 © 2021 CoreLogic, Inc. All Rights Reserved.

Between March and April 2020, sales volumes fell a further -

31.5% across Australia (excluding Victoria), beyond the -13.3%

that sales volumes would typically decline over the month of

April.

Assuming these months had followed recent average changes in

volume, there were 18,000 fewer sales in this period due to

COVID-restrictions. As restrictions started to ease, the monthly

growth rate of sales from May to December 2020 averaged far

higher than typical monthly growth rates in the previous 5 years

(figure 8). Again, Victoria did not follow this trend due to

extended lockdowns in the second half of the year.

Assistant Governor with the RBA, Luci Ellis, noted in a recent

address that durable goods appeared to have seen a ‘catch up’ in

consumption after social distancing restrictions have eased,

because timing of durable goods purchases can shift to periods

after lockdown. This was noted particularly in the case of motor

vehicle sales.

It is reasonable to assume that for a sizeable financial and

temporal commitment such as housing, a period of lockdown is

unlikely to deter a housing purchase altogether, unless

household income is severely affected. Therefore, a similar

phenomenon may be expected in the housing market.

Additionally, consumers may have been more incentivised to

purchase housing following the end of stage 2 restrictions, as the

households saved 22.0% of income through the June 2020

quarter (compared to a then decade average of 7.0%), and a

range of government incentives were introduced for the

purchase or construction of new homes. This has likely been a

key part in the recovery of sales volumes across Melbourne,

where temporary stamp duty discounts are thought to have

created a surge in sales up to the 1st of July.

Fig. 8 Monthly change in sales volumes, National excluding Victoria

28.0%

-10.1%

-31.5%

29.8%

19.3%15.2%

3.1%

8.6% 8.2%

3.2%

-12.0%

33.9%

12.2%

-13.3%

12.7%

-7.3%

-1.4%

4.0%

-2.1%

6.2%3.2%

-19.3%

Feb

ruar

y

Mar

ch

Ap

ril

May

Jun

e

July

Au

gust

Sep

tem

ber

Oct

ob

er

No

vem

ber

Dec

emb

er

2020 Previous 5 year Average

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Ultimately, the months following lockdowns have not only

resulted in a resumption of sales activity, but potentially the

additional sales that would have otherwise transacted during

lockdown periods. This phenomenon was only exacerbated as

restrictions eased across Melbourne and Victoria in the final

quarter of 2020, as seen in the national sales volumes including

Victoria in figure 9 below.

Since the start of 2021, each month of sales has been extremely

elevated on the 5 year average.

In the current environment, there is likely to be a jump in sales

activity as restrictions ease across Sydney. Temporary additional

stamp duty discounts for new homes across NSW expire on the

31st of July, and the current lockdown may make it more difficult

for some people to meet the deadline. However, there are plenty

of places still available for the first home loan deposit scheme

(indeed, tens of thousands of additional places have been made

available for low-deposit home loan schemes), which may

continue to draw forward first home buyer demand across

Sydney as restrictions are eased.

Fig. 9 Monthly sales relative to previous years, National

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2017 2018 2019 2020 2021 5yr average

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Another central theme of CoreLogic reporting through the

pandemic has been the relative stability of property values.

Nationally, values saw a peak-to-trough decline of just -2.1%

through 2020, before a recovery trend in October 2020.

While the housing market declined -2.1% at the national level,

different dynamics played out across the capital cities.

Figure 10 shows how dwelling values across the capital cities

have changed since March 2020, which marked the onset of stage

2 restrictions nationally.

In Melbourne, where economic conditions were weakened

through extended lockdowns, the peak-to-trough decline in

dwelling market values was -5.6%. Although the Melbourne

dwelling market as a whole has since recovered this lost value

(and is at new record highs), there are pockets of the market

where rent values remain far lower than pre-pandemic levels,

and values remain more subdued.

Across smaller capital cities, dwelling values were virtually

untouched by the pandemic, if not further fuelled by low interest

rate settings. With a tight labour market and low COVID-19 case

numbers, Canberra did not see a single month of dwelling value

decline amid lockdowns. Canberra has continued to hit a fresh

record high value every month since September 2019.

As the housing market commenced a recovery trend, we noted

several factors could be attributed to the mild downturn and

swift recovery, including:

• Record low mortgage rates;

• An engineered economic downturn that had a swift recovery;

• Low listings volumes; and, perhaps most importantly;

• Enormous levels of government and institutional support.

Fig. 10 Cumulative change in dwelling values by capital city - March 2020 to June 2021

Housing market values did not ‘crash’, but institutional responses played a key role

Sydney, 14.0%

Melbourne, 5.3%

Brisbane, 13.0%

Adelaide, 14.6%

Perth, 8.3%

Hobart, 20.8%Darwin, 21.4%

ACT, 18.9%

-10%

-5%

0%

5%

10%

15%

20%

25%

Mar

20

Ap

r 2

0

May

20

Jun

20

Jul 2

0

Au

g 2

0

Sep

20

Oct

20

No

v 2

0

Dec

20

Jan

21

Feb

21

Mar

21

Ap

r 2

1

May

21

Jun

21

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In fact, many of the factors that saw resilience in the housing

market can also be tied back to the government and institutional

response to the pandemic. The swift economic recovery was

helped by programs like JobKeeper, which made it easier for

people to return to work by maintaining employment

relationships. Mortgage repayment deferrals were likely a key

factor in reducing new listings added to the market, which may

have otherwise been fuelled by an inability to make mortgage

payments. ABS data showed the largest tenure type of

JobKeeper recipients through September 2020 were home

owners with a mortgage (50.4%), so it is likely government

support payments also supported housing costs.

The importance of these policies is recognised even in a three-

week lockdown, with the NSW treasurer writing to his federal

counterpart, to request a temporary reinstatement of JobKeeper

payment through the lockdown. This request was denied, though

commonwealth assistance is reportedly available to individuals

where income has been impacted by lockdowns, and the NSW

government has begun rollout on a small business support

package. Additionally, some banks are considering “payment

breaks” on loans for those who can demonstrate hardship amid

the Sydney lockdown, though with a more tailored, selective

approach than the broad brush loan repayment deferrals offered

through 2020.

Ultimately, there has not been as strong of a government and

institutional response to the current lockdown conditions when

compared to extended lockdowns last year. This may not affect

the majority of homeowners, or potential home buyers, across

NSW over a three week period. Housing markets have already

proved resilient amid circuit breaker lockdowns. The key

unknown then becomes how long will the current Sydney

lockdown actually last. Housing market conditions could be

weaker amid an extended lockdown that does not see the same

strong institutional response as was seen last year.

12 © 2021 CoreLogic, Inc. All Rights Reserved.

DisclaimersIn compiling this publication, RP Data Pty Ltd trading as CoreLogic has relied upon information supplied by a number of external sources. CoreLogic does not warrant its accuracy or completeness and to the full extent allowed by law excludes liability in contract, tort or otherwise, for any loss or damage sustained by subscribers, or by any other person or body corporate arising from or in connection with the supply or use of the whole or any part of the information in this publication through any cause whatsoever and limits any liability it may have to the amount paid to CoreLogic for the supply of such information.

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