Sydney property prices have defied the COVID-19 doomsday price predictions because of a drastic reduction in housing supply.
New listings have dropped more than 60 per cent in some city regions since the state went into lockdown and there has been minimal distressed sales or panic selling.
This helped prevent an average fall in prices over March, with preliminary data showing the Sydney median home price may finish April relatively unchanged.
My Housing Market economist Andrew Wilson said prices would likely fall at some point but the lack of distressed sales, such as those defaulting on their mortgages, was a healthy sign for the market.
It meant few vendors were in the position where they had to accept whatever the market offered and could hold off selling until they were satisfied with the price.
Buyers have also remained active in the market, particularly those who missed out on properties earlier this year or last year and already have pre-approval for a loan.
CoreLogic head of research Eliza Owen said housing values were relatively resilient considering the economic hit from coronavirus.
Job losses and employees working shorter hours would normally suggest more distressed sales but there is no evidence of this so far, Ms Owen said.
“It seems hard to digest that property values have not plummeted,” she said.
“The fact listing volumes and seller activity is so low, and therefore available housing supply constrained, may be one factor preserving relative stability in property prices.”
Sydney regions with a more than 60 per cent drop in new listings since March included the northwest, eastern suburbs and lower north shore.
There was a 58 per cent drop in Sydney’s south and a similar reduction in new listings on the Northern Beaches, My Housing Market data showed.
McGrath agent Nicholas Wise said there was just a single new apartment listing in Coogee this week but plenty of motivated buyers still looking, including underbidders from auctions earlier this year.
“Transaction activity is down but not the prices,” he said.
Liam Alban and wife Alyssa said they had little choice but to list their Maroubra home amid the coronavirus pandemic because they had just bought their next home.
They were initially nervous about the sale but were relieved when buyers started coming to inspect the home and offers rolled in.
Their home sold before their scheduled online auction and the couple were “very happy with the price”, Mr Alban said.
“We were anxious about our auction but it worked out perfectly,” he said. “There was more interest than we (expected).”
PK Property buyer’s agent Peter Kelaher said most of the housing market was not falling back but simply in hibernation during the crisis, with some exceptions. Premium properties were getting heavily discounted, he said.