07.10.2024 Local News

Why Are Properties Selling Faster Since The Pandemic?

Why Are Properties Selling Faster Since The Pandemic?

Recent data suggests properties have been selling faster in the past four years.

Recent PropTrack data analysed by realestate.com.au reveals that properties have been selling faster since the pandemic. We explore why that is.

What the numbers say

PropTrack measured the number of listings on realestate.com.au that sold within 60 days compared with those that took longer.

It found that before the pandemic, most properties fell into the second category. However, in early 2020, the number of properties taking longer than 60 days to sell began to fall sharply. By the start of 2021, 60% of properties were selling within 60 days than in over 60 days.

This trend of most properties selling in fewer than 60 days continued until September 2022, when the roles were once again reversed – but it didn’t last for long. By May 2023, most properties were again selling in under 60 days, a state of affairs that continued until the end of that year when PropTrack’s data finished.

What’s causing these numbers?

Realestate.com.au says that: “The speed in which listings are sold fluctuates over time, decreasing when market conditions are strong and increasing when the market is in a slump”.

We often point out that property prices are set by the laws of supply and demand, but so too are property sales times.

When properties sell quickly it’s usually because demand is outpacing supply, and when they take longer to sell it’s often because the reverse is true. However, this isn’t always the case. For instance, prestige properties tend to take longer to sell, often regardless of market conditions.

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In 2020 and 2021, we saw pent-up demand collide with low stock levels and even lower interest rates, driving prices to record highs. Then, in 2022, this changed when rising interest rates and cost-of-living pressures impacted buyer demand.

By mid-2023, however, the pace of interest rate rises had slowed and confidence began to return. Equally as importantly, stock levels stayed low.

Further evidence of this can be seen in the auction clearance rates, which have risen and fallen more or less in line with days on market. For instance, at the height of the 2021 property boom, we were seeing Sydney-wide auction clearance rates of around 90%. By mid-2022, these had fallen to below 50%. They then picked up again over 2023, and today stand at close to 70% (and as high as 77% in the City and East).

Other reasons properties take longer to sell

But the state of the market isn’t the only factor that determines how rapidly a property will sell. Instead, there are several factors at play.

  • Property type. Some segments tend to move at a slower pace than others. For instance, prestige homes tend to stay on the market longer, even when conditions are favourable. That’s because there are fewer buyers in this category, and negotiations often take longer, too. On the other hand, some segments tend to sell fast. For instance, apartments that appeal to downsizers currently have fewer days on market.
  • Sales method. In Sydney, auction remains the most common sales method, so often the campaign length is a set period (usually 28 days) and buyers have a deadline. This is also true for sales by expressions of interest.
  • Marketing campaign. Just as there are different sales methods, there are different marketing methods, too. Some are public – such as advertising on realestate.com.au or Domain – and some are private, such as emailing a database and running an off-market campaign. This can impact the length of time it takes to sell, too.
  • Unique features. Properties with energy-efficient features sell faster than those without, according to data from Domain. Other features tend to be in demand too. Depending on where you are in the eastern suburbs, swimming pools, lifts, outdoor spaces and beach or harbour views can all add to demand and lead to a quicker sale.
  • Price expectations. Sometimes properties don’t sell because the owner simply wants more money than the market will pay. While holding off can be a legitimate tactic in a rising market (because prices may rise to meet expectations), in a quieter market it can be devastating – especially if a seller has no foundation for believing people will pay more. In fact, it can sometimes lead to a ‘stale’ listing. When that happens, buyers often expect a significant discount because they fear it may be hard to sell when they eventually move on.

Want more?

If you’re interested in buying or selling property in Sydney’s Eastern suburbs, get in touch.